FACTORY  ORGANIZATION 
AND  ADMINISTRATION 


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FACTORY  ORGANIZATION 
AND  ADMINISTRATION 


BY 


ixJL 


HUGO  DIEMER 

MAJOR   ORDNANCE   U.8.R.,   FORMERLY  PROFESSOR  OF  INDUSTRIAL  ENGINEERING,  PENNSYL- 
VANIA  STATE   COLLEGE;  CONSULTING   INDUSTRIAL   ENGINEER;    M.E.  (OHIO   STATE 
UNIVERSITY);  B.A.  IN    HISTORY,  ECONOMICS  AND  POLITICAL  SCIENCE  (PENN- 
SYLVANIA STATE  COLLEGE)  ;  MEMBER  AMERICAN  SOCIETY  OF  MECHANICAL 
ENGINEERS,  TAYLOR  SOCIETY,  AMERICAN  ACADEMY  OF  POLITICAL 
AND  SOCIAL  SCIENCE,  FELLOW  AMERICAN  ASSOCIATION  FOR 
ADVANCEMENT    OF    SCIENCE,    MEMBER    SOCIETY    FOR 
PROMOTION  OF  ENGINEERING  EDUCATION,  ENGI- 
NEERS* SOCIETY  OF  PENNSYLVANIA;  SIGMA  xi 

HONORARY   SCIENTIFIC  SOCIETY,  ETC. 


THIRD  EDITION 


McGRAW-HILL  BOOK  COMPANY,  INC. 

NEW  YORK:    370  SEVENTH  AVENUE 

LONDON:    6  &  8  BOUVERIE  ST.,  E.  C.  4 

1921 


COPYRIGHT  1910,  1914,  AND  1921,  BY  THE 
McGRAw-HiLL  BOOK  COMPANY,  INC. 


THE. MAPLE. PRESS. YORK. PA 


DEDICATED 

TO    THE 

CAUSE  OF  INDUSTRIAL 
PEACE  AND  CO-OPERATION 


PREFACE  TO  THIRD  EDITION 

IN  preparing  the  third  edition  of  this  text,  the  principal  modi- 
fications which  have  been  necessary  in  order  to  conform  to  the 
evolution  of  management  and  standards  of  present-day  practice 
have  been  in  those  chapters  which  relate  to  general  organization, 
the  personnel  department  including  employment  and  industrial 
relations,  and  functional  control  of  production.  Minor  changes 
have  been  incorporated  in  various  chapters  to  conform  to  current 
methods. 

As  stated  in  the  preface  to  the  first  edition,  this  book  is  in- 
tended to  be  of  service  to  officers  of  manufacturing  corporations, 
works  managers,  superintendents,  accountants,  and  the  heads 
of  such  departments  as  purchasing,  stores,  personnel,  cost,  and 
production,  and  in  fact  to  all  employees  of  manufacturing  cor- 
porations who  desire  to  acquire  a  comprehensive  grasp  of  the 
problems  treated.  It  is  the  result  of  a  good  many  years'  expe- 
rience on  the  part  of  the  writer,  of  which  time  about  one-half 
was  spent  as  an  employee  and  about  one-half  as  a  consultant 
and  executive. 

The  work  has  gradually  acquired  its  present  form  as  the  result 
of  magazine  articles  and  of  lecture  courses  delivered  for  a  number 
of  years  to  students  in  engineering  colleges  and  before  commercial 
and  manufacturing  organizations  and  it  is  believed  that  while 
primarily  intended  for  the  actual  practitioner  in  manufacturing 
work,  it  will  be  of  value  to  engineering  students. 

It  has  been  a  source  of  gratification  to  the  author  that  this 
book  of  his  has  stood  the  test  of  time  so  satisfactorily,  as  has 
been  evidenced  by  its  continued  sale  year  after  year  to  industrial 
executives  and  employees  as  well  as  being  used  as  a  text  in  lead- 
ing colleges  of  engineering,  business  administration  and  com- 
merce and  finance. 

It  is  the  author's  hope  that  the  present  revision  may  result  in 
a  continued  usefulness  of  the  book. 

HUGO  DIEMER. 

25  FOUNTAIN  STREET, 

NEW  HAVEN,  CONN., 
Aug.,  1920. 

vii 


PREFACE  TO  SECOND  EDITION 

IN  rewriting  this  volume,  the  material  has  been  rearranged  in 
what  appeared  to  be  more  logical  sequence,  and  such  new  matter 
has  been  added  as  the  more  important  developments  in  the 
science  of  management  have  demanded.  The  paragraphs  have 
been  numbered  and  given  topical  headings.  References  have 
been  added  at  the  close  of  each  chapter  to  specific  portions  of 
modern  books  bearing  on  the  subject  matter  of  the  chapter. 
These  changes  are  made  with  a  view  to  making  the  book  more 
useful  as  a  help  to  those  who  wish  to  make  further  studies  of  the 
topics  treated  and  to  facilitate  the  use  of  the  book  as  a  text. 

HUGO  DIEMER. 
STATE  COLLEGE,  PA., 
December  15,  1913. 


PREFACE  TO  FIRST  EDITION 

THIS  book  is  intended  to  be  of  service  to  officers  of  manu- 
facturing corporations,  works  managers,  superintendents,  account- 
ants, and  the  heads  of  such  departments  as  purchasing,  stores, 
cost,  and  production,  and  in  fact  to  all  employees  of  manufactur- 
ing corporations  who  desire  to  acquire  a  comprehensive  grasp  of 
the  problems  treated.  It  is  the  result  of  some  twenty  years'  expe- 
rience on  the  part  of  the  writer,  of  which  time  about  one-half 
was  spent  as  an  employee  and  about  one-half  as  a  consultant. 

The  work  has  gradually  acquired  its  present  form  as  the  result 
of  lecture  courses  delivered  for  a  number  of  years  to  senior  stu- 
dents in  engineering  colleges,  and  it  is  believed  that  while  pri- 
marily intended  for  the  actual  practitioner  in  manufacturing 
work,  it  will  be  of  value  to  engineering  students. . 

HUGO  DIEMER. 
STATE  COLLEGE,  PA., 
July  1,  1910. 


vin 


CONTENTS 

CHAPTER  I 

.     PAGE 

THE  PRINCIPLES,  FIELD  AND  METHODS  OF  INDUSTRIAL  MANAGEMENT.  .  1 
Influence  of  tradition,  precedent,  and  analogy  on  industrial 
organization — Data  relating  to  industrial  management.  Where 
found — Is  there  a  science  of  management? — The  field  of  industrial 
management — Efficiency  in  finance — Efficiency  in  organization — 
Efficiency  in  accounting — Efficiency  in  industrial  plants — Effi- 
ciency in  the  selection  and  handling  of  employees — Efficiency  in 
production  systems  and  methods — Efficiency  in  distribution  and 
selling — The  methods  of  industrial  management — Prominent 
principles  of  management — Regulative  principles  of  management — 
Methods  of  the  science  of  management — Taylor's  definition  of  the 
methods  of  industrial  management. 

CHAPTER  II 

INDUSTRIAL  FINANCE .14 

The  corporation — The  corporation  charter — Where  to  incorporate 
— Governmental  control  of  corporations — State  corporation  com- 
missions— Organization  prior  to  incorporation — Capitalization — 
Bonds — Preferred  stock — Common  stock — Depreciation. 

CHAPTER  III 

ORGANIZATION  AND  CONTROL 22 

Organization — Organization  something  distinct  from  management 
and  system — System — Control — Numerical- Military  Type — Spe- 
cialization— Functionalized  type — Selecting  organization  and  con- 
trol— Specific  duties — A  comprehensive  industrial  organization — 
Statistical  division — Division  of  materials — Plant,  equipment 
>  and  processes  division — Routing — Scheduling — Motion  and  time 
studies — Preparing  instructions — Standardization  of  equipment — 
System  division — Progress  of  an  order — Applying  above  principles 
to  smaller  industries — Types  of  organization  charts. 

CHAPTER  IV 

TYPICAL  FACTORY  ORGANIZATIONS 39 

Existing  organizations  widely  different — Importance  of  charting — 
The  works  manager's  position — Organization  chart  of  a  typewriter 
factory — Chart  of  an  automobile  factory — Chart  of  an  engineering 
works — Chart  of  an  electrical  machinery  factory — Chart  showing 
the  functions  of  the  planning  department. 

ix 


x  CONTENTS 

PAGE 
CHAPTER  V 

FACTORY  ACCOUNTS 51 

Accounts  required  by  modern  management  different  from  old 
customs — Double-entry  principles  to  be  applied  to  cost  accounts — 
The  three  fundamental  cost  accounts — Subdivision  of  these  accounts 
and  monthly  closing — "Raw  material"  account — "Work  in 
process"  account — "Finished-stock"  account — Methods  of  allot- 
ting expense  burden — Separate  man-hour  departmental  and  general 
rates — Method  of  establishing  the  hourly  machine  rate — Segrega- 
tion of  works  expense  from  selling  expenses — Detailed  cost  statistics 
and  records — Proper  classification  of  expenditures — Detailed  cost 
posting  methods — Gantt  type  of  charts. 

CHAPTER  VI 

DEPARTMENTAL  REPORTS 58 

Purpose  of  departmental  reports — Bureau  of  statistics  and  records — 
Typical  factory  reports — Drafting  department  reports — Produc- 
tion or  planning  department  reports — Reports  of  finished  product — 
Shipping  department  reports — Cost  department  report — Weekly 
and  monthly  reports — Discussion  of  reports — Graphical  reports — 
Quarterly  reports  of  the  most  important  component  parts — Pay-roll 
analysis — Money  value  of  direct  and  indirect  production — Pur- 
chases. 

CHAPTER  VII 

FACTORY  LOCATION 71 

Importance  of  plant  location — Considerations  influencing  selection 
of  a  certain  town  or  city — Influence  of  raw  materials — Labor  con- 
ditions affecting  selection  of  factory  site — Transportation  facilities 
— Sales  market  as  affecting  plant  location — Cost  of  plant  as  affected 
by  site — Branch  factories — Railroads  as  an  Aid  in  factory  location 
— Selecting  the  site  in  a  given  town — Local  trade  centers — Local 
transportation — Local  labor  market — Local  sales  centers — Sub- 
urban sites. 

CHAPTER  VIII 

THE  PLANNING  OF  FACTORY  BUILDINGS;  AND  THE  INFLUENCE  OF  DESIGN 

ON  THEIR  PRODUCTIVE  CAPACITY 80 

Process  mapping — Routing — Processing  equipment — Arrangement 
of  equipment — Floor  space  occupied  by  equipment — Arrangement 
of  departments — Consecutive  and  simultaneous  processes — Use  of 
templets  in  arranging  departments — Service  departments — Visi- 
bility of  work  and  economy  of  transport — Single-floor  or  multi-floor 
building — Allowing  for  future  expansion — Service  equipment — 
Heating  and  ventilating  apparatus — Lighting  apparatus — Fire  pre- 
vention— Water  supply — Sanitary  engineering — Mechanical  trans- 
portation— Power  generation  and  transmission — Floors — Struc- 


CONTENTS  xi 

PAGE 

tural  and  architectural  details — Employment  of  professional 
industrial  engineers  to  aid  in  planning  of  buildings. 

CHAPTER  IX 

PERSONNEL  DEPARTMENT t  jog 

Personnel    organization — Employment — Job    analysis — Desirable 

qualifications     of     employees — Applications    for     employment 

Employment  record — Record  of  office  employees — Psychologic 
and  physical  tests,  industrial  and  family  tests,  industrial  and 
family  history — Release  cards — Cipher  code  of  characteristics  of 
employees  and  exemployees — Efficiency  records — Safety  and 
compensation — Education — Apprenticeship  system — Suggestion 
system — Social  betterment  and  welfare  work — Medical  division — 
Labor  turnover — Shop  rules. 

CHAPTER  X 

OFFICE  MANAGEMENT 136 

Functions  of  office  manager — Handling  mail — Messenger  service — 
Filing  system — Relative  location  of  offices — Desks. 

CHAPTER  XI 

THE  ORDER  DEPARTMENT 142 

Functions  of  order  department — Classification  of  orders — Manifold 
copies  of  orders — Example  of  order  series — Instructions  as  to  order 
system — Special  orders — Changes  in  orders. 

CHAPTER  XII 

BILLS  OF  MATERIAL 152 

Bill  of  material  defined — Grouping  of  parts — Special  parts — 
Departmental  bills  of  material — Assembly  groups — Bill  of  material 
as  tracing  or  cost  record — Changes  in  bills  of  material — Getting 
work  started  before  completion  of  bill  of  material. 

CHAPTER  XIII 

THE  DRAFTING  DEPARTMENT 159 

Functions  of  drafting  department — Numbering  parts — Stand- 
ardization of  parts — Recording  data  for  standard  detail  parts — 
Drawing  lists — Filing  tracings — Stock  of  blue-prints — Changes  in 
drawings  or  patterns — Blue-prints  for  shop  use — Titles  of  drawings 
— Detail  drawings  for  shop  use — Specifying  limits  of  accuracy- 
Making  and  issuing  blue-prints — Checking  drawings — Time-cards 
in  drafting  department — Chief  draftsman. 

CHAPTER  XIV 

THE  PATTERN  DEPARTMENT 169 

Orders  to  make  patterns— Time-keeping  system  in  pattern  shop- 
Recalling  or  altering  patterns— Checking  patterns  and  recording 
their  travel  and  location. 


xii  CONTENTS 

PAGE 

CHAPTER  XV 

THE  PURCHASING  DEPARTMENT 175 

Functions  of  purchasing  department — Qualifications  of  purchasing 
agent — Requisitions  on  purchasing  department — Purchasing  de- 
partment order  form — Following  up  deliveries — Securing  favorable 
terms — Recording  and  classifying  material,  equipment  and  supplies 
— Returned  goods — Freight,  express  and  drayage — Checking 
invoices. 

CHAPTER  XVI 

STORES  AND  STOCK  DEPARTMENT 185 

Classification  of  materials — Perpetual  inventory  of  castings — 
Perpetual  inventory  of  manufactured  parts — Bin  tickets — "Find- 
ing lists" — Numbering  storeroom  bins — Replenishment  of  stores — 
Monthly  balances  showing  money  value  as  well  as  quantity  of 
stores — Use  of  tabulating  machine  in  obtaining  money  value  of 
daily  material  receipts  and  disbursements — Withdrawing  materials 
from  stores. 

CHAPTER  XVII 

PLANNING  AND  SUPERVISING  PRODUCTION .   201 

Title  of  department  controlling  production — Reasons  for  functional 
control — Carrying  the  functional  organization  into  the  shop — 
Qualifications  of  head  of  production  or  planning  department — 
Relation  of  production  or  planning  department  to  other  depart- 
ments— Routing — Instruction  cards — Rate-fixing  clerk — Order-of- 
work  clerk — Production  or  tracing  clerk — Tracing  individual 
parts — Moving  work  in  process — Rush  orders — Tracing  groups  of 
parts  or  complete  machines — Hastening  purchased  items — Weekly 
report  for  foremen's  meeting — Shop  tags — Detachments  or  split 
lots — Transfer  clerk — Estimate  of  times  of  completion. 

CHAPTER  XVIII 

FOUNDRY  SYSTEMS 224 

Castings  requisitions — Moulders'  and  core-makers'  order  copies — 
Daily  record  of  work  done — Daily  delivery  record — Consecutive 
job  list — Foundry  tracing  card — Scrapped  material — Clerical  help 
required — Indirect  foundry  labor — Daily  cupola  reports — Foundry 
time  ticket — Weekly  cupola  reports. 

CHAPTER  XIX 

THE  MACHINE  SHOP  AND  TOOL  DEPARTMENT ' .  236 

Arrangement  of  machines — Foremen«and  gang  bosses — Tool  room 
independent  of  machine  shop — Relieving  foremen  of  clerical  work 
— Moving  work  in  process — Call  bells — Issuing  blue-prints — 
Repairs  to  machinery  and  transmission  apparatus — Orders  for 
making  tools — Record  on  small  tools — Repetition  work  by  tool- 
makers — Tool-steel  tests — Scheduling  machine-shop  work — Tool 


CONTENTS  xjii 

lists  for  manufactured  parts— Identifying  different  brands  of  tool  A 
steel— Check    system— Bolts,     clamps,    washers    and     nuts    for 
"setting  up"— Storing  tools— Selection  of  machines— Proposals 
for  new  machinery  equipment. 

CHAPTER  XX 

SHIPPING  AND  RECEIVING  DEPARTMENTS 253 

Relation  of  shipping  and  receiving  to  other  departments— Copies 
of  orders  to  be  sent  to  shipping  department— Notice  of  items  ready 

for  shipment — Stores  and  inspection  records  prior  to  shipment 

Packing  rooms— Packing  cards  and  lists— Shipping  records- 
Shipping  program  for  carload  shipments— Car  records — Freight 
payments — Record  by  serial  numbers  of  machines  shipped — 
Routing,  classification  and  rates — Receiving  departments — 
Reports  of  material  received — Reports  of  castings  received — 
Express  charges — Returned  goods — Patterns  received. 

CHAPTER  XXI 

TIME  TAKING >   268 

Time-clocks  and  numbering  men — Clock  card  used  as  job  ticket — 
Time-stamps — Weekly  time-sheet  instructions  to  time-takers — 
Individual  operation  time-slips — Time-slips  for  clock  stamping — 
Time-slip  with  ordinary  operations  printed  on — Tabulating 
machine  systems — Pay-roll  distribution  and  localization  of  depart- 
mental expenses. 

CHAPTER  XXII 

COST  DEPARTMENT 281 

Competition  and  costs — Importance  of  cost  department — Duties 
and  qualifications  of  head  of  cost  department — Cost  system  must 
be  adapted  to  product — Development  of  a  cost  system — Merging 
cost  records  into  regular  double  entry  accounts  of  accounting 
department — Material  costs — Raw  material  costs — Costs  of  manu- 
factured component  parts  made  in  quantity  on  stock  orders  and 
drawn  from  storeroom — Current- value  of  actual  invoice  price  as 
basis  for  material  costs — "Material  burden" — Labor  or  time  post- 
ings on  cost  records — Checking  labor  postings  against  pay-roll — 
"Non-productive"  or  "indirect"  labor — "Standing  orders" — 
Plant  additions,  new  equipment  and  fixtures — Typical  list  of 
"standing  orders" — Items  constituting  expense  burden — "Fixed 
charges"— "Percentage  on  labor"  method  of  apportioning  expense 
burden — Use  of  separate  expense  percentages  for  different  depart- 
ments— Expense  percentage  different  for  different  kinds  of  product 
— Hourly  expense  rates — Departmental  hourly  expense  rates  or 
local  burden  rates — Hourly  machine  rates — Machine  rate  should 
always  be  separate  and  independent  of  other  expenses  not  connected 
with  ownership  and  operation  of  machines — Wide  variation  in  costs 
in  same  establishment  shown  by  applying  the  above  different 


xiv  CONTENTS 

PAGE 

methods  of  apportioning  expense  burden — Importance  of  manu- 
facturers in  same  industry  using  same  methods  of  apportioning 
expense  in  their  cost  systems — Cooperation  between  accounting 
and  cost  departments — Notification  of  completion  of  orders — Cost 
summaries — Comparative  individual  part  costs — Comparative  com- 
plete machine  or  assembly  group  costs — Competitors'  prices. 

CHAPTER  XXIII 

AIDS  IN  TAKING  INVENTORY 304 

Advantages  of  "perpetual"  inventories — Classification  of  items  to 
be  inventoried — Tag  system  of  taking  annual  inventory — Checking 
inventory — Material  in  transit — Classification  of  work  in  process 
and  finished  product — Units  of  measurement — Shop  order  numbers 
for  work  in  process — Depreciation  on  obsolete  goods — Collecting 
inventory  tags — Sold  goods — Classifying  materials — Equipment 
inventory — Depreciation  and  repairs  on  equipment — Duplicate 
inventory  tags — Proper  percentage  of  depreciation — Inventorying 
patterns  and  drawing — Perpetual  inventories  to  be  verified  by 
actual  count — "Replacement"  values — Cost  system  as  an  aid  to 
inventorying — Congested  and  disorderly  stock-rooms — Precau- 
tions regarding  inventory  taking. 

CHAPTER  XXIV 

INSPECTION  METHODS  IN  MODERN  MACHINE  SHOPS 317 

General  classification  of  inspection — Inspection  of  raw  materials 
and  purchased  items — Inspection  of  manufactured  product — 
Dimensional  inspection — Floor  inspection — Verification  of  inspec- 
tion— Altering  inspected  parts — Inspection  of  assembled  groups — 
Erection  inspection — Electrical  Inspection — Final  inspection  and 
test  of  complete  machines — Organization  of  inspection  depart- 
ment— Qualifications  of  inspectors — Errors  and  defects — Testing 
distinct  from  inspection — Test  reports  and  records. 

CHAPTER  XXV 

RATE  FIXING  AND  TIME  STUDIES 329 

Former  time  standards  not  a  reliable  basis  for  rate  fixing — Analysis 
of  work  into  preparatory  and  supplementary  steps  and  active  work 
— Rate  fixing  on  non-repetitive  or  "job"  work — Foreman's  time 
standards  usually  guess  work — Analysis  of  machine  speeds  and 
feeds  to  be  undertaken  prior  to  rate  fixing — Instruments  and  devices 
needed  for  time  study — Idle  time  of  machines — Taylor's  description 
of  correct  time  study — Confining  rates  to  new  operations  and  new 
pieces — Form  for  taking  observations  for  time  studies — Computa- 
tions and  statistics  as  an  aid  to  observations — Notice  of  new  rates 
— Time  study  and  rate  fixing  to  be  permanent  rather  than  tempo- 
rary— Abridged  time  studies  for  transient  work. 


CONTENTS  xv 

PAGE 

CHAPTER  XXVI 

WAGE  SYSTEMS 342 

Wage  system  must  be  adapted  to  conditions — Fixed  hourly  or  day 
rate — Efficiency  records  under  day-rate — Comparative  time 
records — Piece-rate  system — Piece  rates  must  not  be  cut — Differ- 
ential piece-rate  system — Records  of  piece-rate  earnings — Gain- 
sharing  methods — Premium  wage  system — Modifications  of 
premium  system — Notices  to  employees  describing  premium  wage 
system — Combined  bonus  and  premium  system — Notices  to 
employees,  describing  combined  bonus  and  premium  system — 
Bonus  system  or  "task  work  with  a  bonus" — Individual  job  bonus 
system — Incentives  to  securing  continuous  efficiency — Figuring 
premium  or  bonus  pay  rolls — Notifications  to  workmen  of  gains  or 
losses  under  premium  or  bonus  system. 

CHAPTER  XXVII 

PRINCIPLES  UNDERLYING  GOOD  MANAGEMENT 359 

Clear-cut  organization — Mutual  confidence  and  cooperation — 
Officials  to  be  relieved  of  petty  duties — Internal  harmony  essential 
— A  successful  business  the  accumulation  of  many  men's  ideas — 
Suggestion  systems — Committee  meetings — Systematic  and  scien- 
tific selection  and  placing  of  men — Justice  in  wage  systems — Suffi- 
cient clerical  force — Apprenticeship  systems — Industrial  and 
vocational  education-continuation  schools — Bureaus  of  voca-  • 
tional  guidance — Educational  activities  must  not  be  hampered 
by  factional  influence  brought  to  bear  by  organized  business  or 
organized  labor — Some  examples  of  good  apprenticeship  systems — 
Cooperative  schools — Employment  of  industrial  engineers  in  an 
advisory  capacity. 

CHAPTER  XXVIII 

A  BIBLIOGRAPHY  OF  WORKS  MANAGEMENT 374 

Reading  and  study  necessary  for  the  man  who  aspires  to  success  in 
business  administration  and  industrial  management — A  business 
or  shop  library  for  managers  and  employees — A  bibliography  of  the 
classical  or  pioneer  literature  of  works  management  or  industrial 
engineering  prior  to  1904 — A  standard  reference  library  of  industrial 
management  and  industrial  engineering — A  comprehensive  library 
of  supplementary  reading  for  a  school  of  engineering  or  school  of 
business  administration  or  public  library. 

INDEX  389 


FACTORY  ORGANIZATION  AND 
ADMINISTRATION 

CHAPTER  I 

THE  PRINCIPLES,  FIELD  AND  METHODS  OF  INDUSTRIAL 
MANAGEMENT 

1.  Influence  of  Tradition,  Precedent,  and  Analogy  on  Industrial 
Organization. — If  we  were  to  look  for  the  influences  which  have 
helped  to  establish  the  principles  of  industrial  management, 
we  would  have  to  go  back  earlier  even  than  the  beginnings  of 
civilization.  When  two  barbarian  tribes  made  war  on  each 
other  that  tribe  which  possessed  the  best  fighting  organization 
won  out. 

Principles  of  military  management  were  appreciated  in  the 
remotest  antiquity.  Training  in  discipline  and  knowledge  of 
different  methods  of  attack,  utilizing  men  best  fitted  to  handle 
certain  kinds  of  weapons,  and  disposing  of  these  various  classes 
of  men  in  the  most  effective  ways,  how  many  should  be  in  each 
group,  who  should  be  the  leaders  in  each  group,  how  these 
leaders  should  act  in  concert  under  the  direction  of  general  lead- 
ers, were  problems  of  management  which  were  considered  and 
solved  6000  years  ago  in  Egypt,  Assyria,  and  Persia. 

Similar  problems  in  organization  and  management  presented 
themselves  in  connection  with  the  disposition  of  the  captured 
prisoners  who  were  usually  sold  into  slavery. 

As  trade  by  caravan  and  vessels  developed,  new  kinds  of 
problems  in  organization  and  management  developed. 

Again  as  various  tribes  allied  themselves  under  common 
leadership  they  developed  governmental  and  legal  organization 
and  administration. 

We  find  at  a  later  date  the  organization  and  management 
of  slaves  in  conducting  productive  industries,  such  as  brick 
making,  stone  hewing,  lumber  cutting,  weaving,  and  transporta- 
tion. Still  later  there  came  about  the  development  of  the 
so-called  guilds  and  free  castes  of  skilled  workmen. 

1 


2          FACTORY  ORGANIZATION  AND  ADMINISTRATION 

Elaborate  and  complicated  organizations  are  to  be  found 
in  the  management  of  the  superstitious  rites  and  religions  of  the 
various  tribes  and  nations. 

We  may  summarize  the  sources  of  tradition,  precedent,  and 
analogy  from  which  modern  industrial  rnanagement  has  been 
supplied" with  formative  influences  as  arising  from: 

(1)  Military  tradition  and  usage. 

(2)  Slavery  and  serfdom. 

(3)  Customs  of  trade  and  navigation. 

(4)  Civic  and  legal  customs. 

(5)  Religious  organizations. 

(6)  Existing  industrial  organizations. 

The  ancient  and  existing  industrial  organizations  which  exerted 
their  influence  include  such  as  the  primitive  condition  of  indi- 
vidual independence  followed  by  the  establishment  of  toolmakers, 
crafts,  such  as  the  arrow-makers  and  artificers  of  weapons. 
Analogies  have  also  been  drawn  from  the  domestic  system  which 
was  prevalent  in  England  in  the  fifteenth  century,  where  groups 
of  families  devoted  themselves  to  specialized  activities.  In  the 
family  system  the  principle  of  co-operation  is  exemplified  and 
specialization  and  sub-division  of  labor  is  applied.  In  the 
merchant  and  craft  guilds  the  master  craftsman  was  the  pro- 
prietor. He  was  the  business  manager  as  well  as  the  most 
skilled  workman.  Prior  to  the  organization  of  the  big  trading 
corporations,  the  individual  or  group  shipping  undertaking 
affords  an  analogy.  In  these  undertakings  negotiations  were 
carried  on  between  the  crew  and  the  officers  as  to  what  should 
be  the  shares  for  owning  the  ship,  for  navigating  it,  for  the  ship's 
surgeon,  the  steward,  and  so  on,  and  what  should  be  the  com- 
pensation of  each  man  in  the  organization,  this  agreement  being 
ordinarily  binding  for  only  a  single  exploit. 

With  the  advent  of  the  industrial  revolution  covering  the 
period  of  the  middle  eighteenth  century  to  the  early  nineteenth 
century  when  the  epoch-making  power  and  machinery  inventions 
startled  the  world,  the  introduction  of  the  factory  system  in 
which  dormitory  and  shop  were  combined,  brought  into  play 
principles  of  organization  derived  from  various  of  the  foregoing 
forces,  but  with  an  autocratic  control  adapted  from  the  feudal 
manor. 

2.  Data  Relating  to  Industrial  Management.  Where  Found. — 
The  data  of  industrial  management  are  enumerated  in  allitera- 


THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT  3 

live  form  by  Charles  B.  Going  in  a  series  of  words  beginning 
with  the  letter  M,  which  he  designates  as  ''Materials,  Markets, 
Money,  Men,  and  Machinery." 

While  this  list  of  words  is  suggestive  it  will  be  a  little  more 
comprehensive  to  enumerate  the  various  sciences  from  which 
industrial  management  draws  its  data  and  to  which  it  is  closely 
related. 

Selecting  first  from  the  list  given  by  Mr.  Going  the  subjects 
of  markets  and  money  it  is  quite  apparent  that  a  study  of  these 
two  topics  leads  us  to  an  investigation  of  the  science  of  economics 
with  the  view  of  selecting  from  that  science  such  data  and  rules 
as  apply  to  industrial  management.  An  investigation  of  the 
science  of  economics  will  lead  us  to  such  topics  as  finance, 
accounts,  and  statistics. 

We  will  not  have  gone  far  in  our  study  of  economics  before 
we  find  we  are  bound  to  get  into  the  fields  of  social  and  polit- 
ical science  as  containing  some  data  relating  to  industrial 
management. 

Looking  again  at  the  list  of  words  beginning  with  M  we  find 
Men.  The  selection  of  the  right  men  to  do  certain  work  and 
a  selection  of  the  best  work  for  certain  men  leads  us  into  the 
field  of  psychology.  We  do  not  need  to  go  far  into  this  field 
until  we  begin  to  realize  that  the  simplest  forms  of  tribal  and 
family  life  demanded  of  the  leader  some  instinctive  knowledge 
of  the  feelings,  impulses,  and  desires  of  others.  He  must  respect 
prejudice,  be  able  to  persuade  to  action,  secure  confidence  and 
obedience.  All  of  these  powers  imply  some  knowledge  of  his 
own  conscience.  It  is  singular  that  psychology  as  a  vital  factor 
in  works  management  has  not  been  recognized  until  within  the 
very  last  few  years. 

The  topics  of  materials  and  machinery  come  under  the  head- 
ing of  technical  engineering.  Engineering  knowledge  is  required 
also  for  the  proper  solution  of  problems  connected  with  the  design 
and  layout  of  factory  plants  and  buildings,  their  service  equip- 
ment including  power  plants,  transmission  apparatus,  light, 
heat,  ventilation  and  sanitation,  elevators,  cranes,  mechanical 
transportation,  and  the  various  machines  required  in  the  proc- 
esses of  the  industries. 

We  might  then  summarize  as  the  sciences  closely  related  to 
the  science  of  management: 

A    (1)  Economic,  social  and  political  science. 
/     (2)  Psychology. 
I     (3)  Engineering. 


4  FACTORY  ORGANIZATION  AND  ADMINISTRATION 

3.  Is  there  a  Science  of  Management?  —  The  simplest  defini- 
tion of  science  is  knowledge  methodically  digested  and  arranged. 
Every  science  has  a  subject  matter  and  methods  more  or  less 
peculiarly  its  own.  Botany,  physics  and  chemistry  each  have 
more  or  less  distinct  fields  and  more  or  less  diverse  methods. 
The  science  of  management  has  its  own  fields.  Tt. 


analyses,  classifies  and  explains  the  factors  which  Contribute  to  __ 
bring  about  emcient  industrial  conditions  and  results.  _It  also 
Ms  methods  peculiarly-its  own. 

4.  The  Field  of  Industrial  Management.  —  Industrial  manage- 
ment is  one  of  the  most  important  economic  factors  of  our  time. 
It  is  intimately  related  to  problems  of  individual  and  national 
welfare.     Hence  any  improvements  that  tend  to  lessen  waste 
and  promote,  health,  wealth  and  happiness  in  any  of  the  fields 
of  action  or  Departments  controlled  by  the  industrial  manager 
are  full  of  a  human  interest  and  appeal  over  and  above  any 
technical  merit. 

Efficiency  in  industrial   management  involves   efficiency  in« 
each  of  the  various  divisions  with  which  any  management  has  to 
deal.     A  general  list  of  the  fields  of  action  covered  by  industrial 
management    in    which    there    is    opportunity    for    developing 
efficiency,     would    include    the    following:     (1)  Finance,     (2)* 
Organization,     (3)    Accounting,     (4)    Industrial     plants,    their* 
service  and  process  equipment,  (5)  The  selection  and  handling 
of  employees,  (6)  Production  Systems  and  Methods,  (7)  Distribu- 
tion, including  selling  and  advertising. 

5.  Efficiency  in  Finance.  —  Many  concerns  are  over-burdened 
by  reason  of  the  financing  not  having  been  accomplished  with 
the  best  judgment  and  ability.     More  money  than  necessary 
may  have  been  spent  in  promoting.     Again,  if  properties,  patents 
or  good  will  have  been  paid  for  by  shares  of  stock,  the  amount  of 
stock  given  in  payment  may  have  been  excessive.     In  either  of 
these  cases  the  establishment  is  loaded  with  a  burden  of  which  it 
cannot  rid  itself.     On  account  of  this  well-known  fact  it  fre- 
quently happens  that  a  man  who  is  primarily  a  financier  is  put 
at  the  head  of  an  industrial  establishment;  and  we  are  then 
afterward  confronted  by  the  condition  that  although  our  financ- 
ing was  efficiently  done,  we  have  a  man  at  the  head  of  the  business 
who  is  primarily  a  financier  and  knows  nothing  about  manu- 
facturing.    He  is  carried  on  the  pay-roll  at  a  heavy  salary,  which 
becomes  a  constant  drain  on  the  establishment.     In  the  case  of 
a  bank  or  brokerage  house,  this  type  of  man  is  valuable  every  day. 
On  the  other  hand,  from  the  standpoint  of  the  best  interests  of 


THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT  5 

the  manufacturing  concern,  he  is  valuable  only  in  cases  of 
financial  crisis  and  is  frequently  unable  to  present  the  true  state 
of  internal  affairs  of  the  factory  to  the  ultimate  ownership. 

6.  Efficiency  in  Organization. — There  is  a  wide  field  open  to 
investigation  as  to  the  kinds  of  departmentalization  which  have 
proven  most  effective  in  various  industries.     Another  question 
is  that  which  deals  with  the  extent  to  which  departmentalization 
shall  be  carried  in  various  sizes  of  the  same  industry — for  example, 
the  determination  of  what  is  the  best  form  of  departmentalized 
organization  for  a  steam-engine  manufacturing  company  employ- 
ing 150  men  as  compared  with  the  departmentalized  organization 
for  similar  companies  employing  say  300,  600,  900,  or  1200  men. 

Efficiency  in  organization  demands  definite  knowledge  of 
methods  of  securing  individual  effort  and  enthusiasm  as  well  as 
departmental  co-ordination.  It  demands  a  knowledge  of  what 
has  been  accomplished  by  department  meetings,  by  meetings  of 
line  officers  with  separate  staff  heads,  by  club,  athletic  and 
welfare  work  among  employees,  and  other  means  of  securing  good 
will  and  loyalty. 

It  demands  definite  knowledge  as  to  how  far  matters  of  policy 
and  general  procedure  may  be  made  the  subjects  of  thought  and 
discussion  by  men  in  the  ranks  and  the  lower  officials  as  well  as 
by  higher  officials;  and  on  the  other  hand,  to  what  extent'  methods 
as  well  as  results  shall  be  considered  and  initiated  by  the  higher 
authorities. 

It  demands  up-to-date  knowledge  of  the  evolution  of  functional 
control  from  the  form  originally  recommended  by  Dr.  Frederick 
W.  Taylor  to  its  present-day  practical  application  to  the  general 
organization  as  well  as  internally,  not  only  in  the  manufacturing 
department  but  in  the  accounting,  purchasing,  sales,  and  per- 
sonnel departments. 

7.  Efficiency  in  Accounting. — At  the  head  of  the  accounting 
department  we  must  have  a  man  who  knows  how  to  prepare  a 
balance  sheet  that  will  stand  the  criticism  of  the  most  conserva- 
tive auditor  on  the  one  hand;  although  on  the  other  hand  he 
must  be  so  conversant  with  current  practice  as  not  to  fail  to  list 
as  assets  everything  to  which  his  company  is  justly  entitled.     He 
must  know  what  constitutes  under-valuation  as  well  as  what 
constitutes  over-valuation. 

He  must  see  the  advantage  of  co-ordinating  the  manufacturing 
records  with  the  accounting  system.  He  must  realize  the  great 


6  FACTORY  ORGANIZATION  AND  ADMINISTRATION 

advantage  accruing  from  carrying  in  terms  of  money  such  records 
as  the  current  accounts  of  stores,  of  raw  materials,  of  work  in 
process,  and  finished  stock,  and  closing  these  into  a  monthly  bal- 
ance sheet.  He  must  appreciate  the  advantage  of  differentiating 
the  expense  accounts  so  as  to  allocate  them  to  different  kinds  of 
product  in  a  manner  that  will  represent  the  true  costs  and  true 
profits  of  different  kinds  of  product  so  as  to  enable  the  concern 
making  a  varied  product  to  compete  on  the  basis  of  actual 
knowledge  of  true  costs  with  a  concern  specializing  in  only  one  of 
the  varied  products  which  his  company  makes.  Here  again  the 
old-fashioned  bookkeeper  type  of  accountant  who  urges  for  a 
single  expense  rate  based  on  the  old-time  percentage  plan, 
because  in  his  opinion  it  costs  less  to  get  this  than  a  differentiated 
hourly  expense  rate  for  the  different  kinds  of  product,  is  wholly 
out  of  place  and  distinctly  harmful  to  the  interests  of  the  ultimate 
ownership  in  an  industrial  establishment. 

An  efficient  head  of  an  accounting  department  needs  to  have  a 
broader  view  of  his  sphere  of  action  than  is  possessed  by  a  book- 
keeper. He  must  be  broad  minded  enough  to  avoid  blocking 
the  path  of  progress  of  the  progressive  works  manager  by  clinging 
to  old-time  methods.  The  particular  old-time  methods  which 
he  needs  to  revise  are  those  which  have  to  do  with  manufacturing 
and  expense  accounts.  These  he  needs  to  rehabilitate  so  as  to 
show  every  month  or  every  four  weeks  classified  profits  and  losses 
on  products  and  classified  expenses  per  unit  of  product  and  per 
unit  of  time. 

J        He  must  be  discriminating  enough  to  appreciate  the  modern 
£\   conception  of  the  differentiation  of  the  work  assignable  to  a 

f    treasurer,  a  comptroller,  an  auditor,  a  statistician,  and  a  cost 

^  service  engineer. 

•  *  '  He  must  realize  the  importance  of  scientific  allotment  of 
Jl  budgets  to  departments  and  the  furnishing  of  departments  with 
ji  the  necessary  follow-ups  and  break-downs. 

/I  8.  Efficiency  in  Industrial  Plants  may  be  said  to  include 
efficiency  in  plant,  in  equipment,  in  the  departmental  arrange- 
ment, in  power  generation  and  distribution,  heating,  ventilation, 
illumination,  sanitation,  and  mechanical  transportation  of 
material,  and  in  machine  and  tool  processes. 

Efficiency  in  factory  location  demands  a  knowledge  of  economic 
and  trade  conditions  acquired  only  by  a  very  careful  study. 
Efficiency  in  buildings  and  the  arrangement  of  departments  in 


THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT  7 

these  buildings  requires  a  careful  study  of  process  mapping  and 
of  the  types  fitted  to  different  classes  of  industry.  Efficiency  in 
equipment  required  a  technical  knowledge  of  all  of  the  processes 
involved.  The  problem  for  one  industry  is  always  a  probletiflby 
itself,  yet  industries  can  be  classified  and  types  of  plant  can  be 
selected  which  are  best  adapted  to  certain  types  of  industry. 

9.  Efficiency  in  the  Selection  and  Handling  of  Employees. — 
The  problems  of  selecting  the  right  man  for  a  given  task  and 
selecting  the  right  kind  of  work  for  a  certain  man  involve  a  care- 
ful analysis  of  both  the  work  and  the  men.     This  requires  a 
knowledge  of  the  industrial  processes 'whether  they  be  mechanical 
or  mental  and  also  a  knowledge  of  the  physical  and  psychological 
qualities  of  various  types  of  individuals. 

The  control  of  industrial  relations^problems  is  so  important 
a  factor  in  industrial  management  th ft  the  position  of  personnel 
manager  is  one  ranking  with  that!  of  works  manager.  The 
present  day  tendency  is  to  make  the  personnel  manager  respon- 
sible directly  to  the  Company  President.  In  corporations  where 
a  number  of  Vice  Presidencies  have  been  created  to  enable 
important  executives  to  secure  an  interest  in  and  recognition 
by  the  proprietorship,  the  personnel  manager  is  a  Vice  President. 

10.  Efficiency  in  Production   Systems  and  Methods. — The 
word  " production"  indicates  the  making  or  manufacturing  of 
commodities.     Engineering  as    applied    to    production    means' 
the  planning  in  advance  of  production  so  as  to  secure  certain 
results.     A  man  may  be  a  good  mechanic  but  no  engineer.     The 
distinction  between  the  mechanic  and  the  engineer  is  that  the 
mechanic  cuts  and  tries,  and  works  by  formulae  based  on  empiri- 
cism.    The  engineer  calculates  and  plans  with  absolute  certainty 
of  the  accomplishment  of  the  final  results  in  accordance  with 
his  plans,  which  are  based  ultimately  on  fundamental  truths  of 
natural  science. 

Instinct  and  experience  are  valuable  guides  to  the  work  of 
either  the  mechanic  or  the  engineer,  but  they  serve  only  as  the 
coast-line  does  to  the  mariner  without  chart  or  compass.  Guided 
by  the  chart  and  compass  of  his  certain  knowledge,  the  engineer 
is  as  positive  of  results  in  designing,  for  instance,  a  machine  he 
has  never  before  seen  as  is  the  mariner  of  reaching  a  port  he  may 
never  before  have  set  eyes  on. 

The  mechanical  engineer  has  to  do  with  the  design,  construc- 
tion, testing,  and  operating  of  machines.  The  mechanical  engi- 
neer designs  with  certainty  of  correct  operation  and  adequate 
strength. 


8  FACTORY  ORGANIZATION  AND  ADMINISTRATION 

It  is  the  business  of  the  production  engineer  to  know  every, 
single  item  that  constitutes  his  finished  product,  and  every  step 
involved  in  the  handling  of  every  piece.  He  must  know  what  is 
the  most  advantageous  manufacturing  quantity  of  every  single 
item  so  as  to  secure  uniformity  of  flow  as  well  as  economy  of 
manufacture.  He  must  know  how  long  each  step  ought  to 
take  under  the  best  attainable  working  conditions.  He  must 
be  able  to  tell  at  any  time  the  exact  condition  as  regards  quantity 
and  state  of  finishedness  of  every  part  involved  in  his  manu- 
facturing process. 

Efficiency  in  production  systems  and  methods  demands  a 
thorough  understanding  of  the  matters  connected  with  the  phases 
of  manufacturing  which  are  included  in  what  is  at  the  present 
time  designated  as  the  planning  department.  This  involves  a 
knowledge  of  the  correct  handling  of  such  matters  as  bills  of 
material,  drawing  lists,  perpetual  inventories  of  stores,  purchase 
records,  process  maps,  route  diagrams  and  charts,  instruction 
cards,  time  and  motion  studies,  tool  lists,  order  of  work  and 
tracing  records,  methods  of  promptly  moving  work  in  process 
from  department  to  department,  as  well  as  best  methods  of  carry- 
ing on  the  productive  processes  of  an  industry,  including  such 
matters  as  feeds  and  speeds  of  machines,  belt,  chain  and  motor 
drives,  repairs  to  machinery,  and  inspection  and  test  of  product. 

The  engineer  must  be  able  not  only  to  design,  but  to  execute. 
A  draftsman  may  be  able  to  design,  but  unless  he  is  able  to  execute 
his  designs  to  successful  operation  he  cannot  be  classed  as  an 
engineer.  The  production  engineer  must  be  able  to  execute  in 
the  most  efficient  manner  the  work  as  it  has  been  planned. 

11.  Efficiency  in  Distribution  and  Selling. — There  are  many 
correspondence  courses  in  salesmanship  offered  at  the  present 
time.  A  study  of  any  of  these  courses  will  reveal  the  large  field 
open  for  work  in  the  interests  of  greater  efficiency.  Efficiency 
in  the  selling  department  recognizes  the  fact  that  it  is  not 
quantity  of  sales  which  merits  extra  pay.  That  particular  sales- 
man or  selling  office  is  entitled  to  the  greatest  reward  who  has  sold 
goods  on  which  the  manufacturer  has  made  the  largest  profits, 
whether  it  has  been  the  result  of  quantity  of  sales  or  of  careful 
selection,  with  an  effort  to  sell  those  things  on  which  the  manu- 
facturer could  realize  the  greatest  profit. 

Progressive  efficiency  in  selling  demands  extensive  research 
work  in  various  industries  to  accumulate  data  covering  the 


THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT  9 

methods  and  actual  costs  of  selling.  It  is  only  by  the  accumu- 
lation and  comparison  of  such  data  that  we,  as  a  nation,  can  make 
progress  in  reducing  distribution  costs. 

The  research  work  above  indicated  is  coming  to  be  designated 
as  sales  engineering,  requiring  analytical  ability  applied  to 
marketing  and  product  problems.  It  is  coming  to  be  recognized 
that  sales  engineering  demands  a  distinctly  different  type  of 
man  from  sales  production  or  actual  selling. 

Finally  it  must  be  recognized  that  economies  in  production 
together  with  lower  costs  of  manufacture  will  result  in  continual 
manufacturing  activity  only  if  some  corresponding  reductions 
in  selling  prices  are  made.  National  and  international  economy 
demands  that  production  of  all  kinds  be  maintained  at  a  maxi- 
mum; and  in  o^der  that  this  condition  may  exist,  we  must  be 
content  with  such  profits  as  will  provide  fair  returns  in  the  way 
of  dividends  on  actual  investment,  sinking  funds  to  co^er  depre- 
ciations and  a  reasonable  reserve  for  bad  business  years.  After 
these  obligations  have  been  met,  however,  there  is  no  justifica- 
tion from  an  economic  standpoint  for  adding  any  further  profit 
over  cost  of  production  to  increase  selling  price.  . 

12.  The  Methods  of  Industrial  Management. — A  committee 
of  the  American  Society  of  Mechanical  Engineers  made  an  ex- 
tensive canvass  in  the  fall  of  1912  to  determine  what  were  the 
new  elements  in  modern  management  as  well  as  what  the  com- 
mittee designated  as  the  regulative  principles  of  industrial  man- 
agement. The  committee  confirmed  Adam  Smith's  statement 
made  in  1776  in  his  "Wealth  of  Nations,"  in  which  he  held  that 
the  application  of  the  principle  of  division  of  labor  was  the  basis 
of  manufacture.  The  committee  also  agreed  with  Charles  Bab- 
bage,  who  in  his  work  entitled  "  Economy  of  Machinery  and 
Manufacture"  written  in  1832,  added  another  principle,  namely 
the  transference  of  skill.  The  committee  quotes  from  Adam 
Smith's  "  Wealth  of  Nations,"  as  follows: 

"This  great  increase  of  the  quantity  of  work  which,  in  consequence 
of  the  division  of  labor,  the  same  number  of  people  are  capable  of  per- 
forming, is  owing  to  three  different  circumstances;  first,  to  the  increase 
of  dexterity  in  every  particular  workman;  secondly,  to  the  saving  of  the 
time  which  is  commonly  lost  in  passing  from  one  species  of  work  to 
another;  and  lastly,  to  the  invention  of  a  great  number  of  machines 
which  facilitate  and  abridge  labor,  and  enable  one  man  to  do  the  work 
of  many." 


10         FACTORY  ORGANIZATION  AND  ADMINISTRATION 

They  also  quote  from  Charles  Babbage's  "Economy  of  Ma- 
chinery and  Manufacture"  as  follows: 

"That  the  master  manufacturer,  by  dividing  the  work  to  be  executed 
into  different  processes,  each  requiring  different  degrees  of  skill  and 
force,  can  purchase  exactly  that  precise  quantity  of  both  which  is  neces- 
sary for  each  process;  whereas,  if  the  whole  work  were  executed  by  one 
workman,  that  person  must  possess  sufficient  skill  to  perform  the  most 
difficult,  and  sufficient  strength  to  execute  the  most  laborious  of  the 
operations  into  which  the  art  is  divided." 

The  committe  also  reported  that  methods  of  analyzing  and 
recording  operations  were  early  developed.  Charles  Babbage 
gives  a  table  from  a  French  investigator  showing  the  number  of 
operations,  time  for  each,  cost  of  each,  and  expense  of  tools 
and  materials  for  making  pins  in  France  in  1760. 

13.  Prominent  Principles  of  Management. — As  a  result  of  the 
above  investigations  the  committee  state  that  they  conceive  the 
prominent  element  in  present-day  industrial  management  to  be: 
the  mental  attitude  that  consciously  applies  the  transference 
of  skill  to  all  the  activities  of  industry. 

The  committee  report  the  following  as  the  most  satisfactory 
answers  to  the  question:  "What  are  the  regulative  principles 
of  industrial  management?" 

The  regulative  principles  of  management  along  scientific 
lines  include  four  important  elements: 

(a)  Planning  of  the  processes  and  operations  in  detail  by  a 
special  department  organized  for  this  purpose. 

(b)  Functional  organization  by  which  each  man  superintend- 
ing the  workman  is  responsible  for  a  single  line  of  effort.     This 
is  distinctly  opposed  to  the  older  type  of  military  organization, 
where  every  man  in  the  management  is  given  a  combination 
of  executive,  legislative  and  judicial  functions. 

(c)  Training  the  worker  so  as  to  require  him  to  do  each  job 
in  what  has  been  found  to  be  the  best  method  of  operation. 

(d)  Equable  payment  of  the  workers  based  on  quantity  and 
quality  of  output  of  each  individual.     This  involves  scientific 
analysis  of  each  operation  to  determine  the  proper  time  that 
should  be  required  for  its  accomplishment  and  also  high  payment 
for  the  worker  who  obtains  the  object  sought. 

Another  correspondent  finds  the  .solution  of  problems  of 
management  in  the  observing  and  regulating  of  three  classes  of 
industrial  phenomena: 


THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT          11 

"(a)  The  economic  results  of  different  arrangements  and  forms  of 
materials  and  operations  upon  them,  either  to  produce  equipment  or 
product.  This  covers  the  whole  field  of  recorded  experience  from 
invention  and  design  of  product  and  tools  down,  through  the  successive 
shop  processes  to  ultimate  finished  product  and  its  tests  in  service.  It 
is  the  object  of  the  scientific  method  to  make  the  best  of  this  experience, 
in  its  essential  details,  readily  available  for  all  concerned,  and  to  see 
that  it  is  actually  absorbed  and  put  in  practice. 

"(b)  The  economic  results  of  varying  executive  methods  for  effect- 
ively directing  human  efforts  as  a  whole  in  the  use  of  the  above  experi- 
ence. This  covers  the  entire  field  of  building  up,  co-ordinating  and  con- 
trolling the  supervising  organization  of  a  plant  with  its  statistical  and 
recording  systems. 

"(c)  The  economic  results  of  steps  taken  to  raise  the  industrial 
efficiency  of  the  individual  worker  in  every  grade  of  service.  This 
covers  the  whole  problem  of  labor  reward,  intensified  ability,  conserved 
energy  and  the  general  relations  of  employer  and  employee." 

14.  Regulative  Principles  of  Management. — Messrs.  Church 
and  Alford  have  attempted  to  condense  the  above  regulative 
principles  still  further  and  have  denned  them  as :  (a)  The  system- 
atic use  of  experience;   (b)  The  economic  control  of  effort;  (c) 
The  promotion  of  personal  effectiveness. 

The  first  includes  the  use,  in  all  essential  detail,  of  traditional 
knowledge,  personal  experience  and  the  results  of  scientific 
study  on  the  part  of  the  executive  force.  It  implies  the  accumu- 
lation and  use  of  records  and  the  setting  up  of  standards. 

The  second  includes  the  division  and  subsequent  co-ordination 
of  both  executive  and  productive  labor;  the  planning  of  single 
lines  of  effort,  the  setting  of  definite  tasks  and  the  comparison 
of  results;  and  the  effective  training  of  the  workers.  It  implies 
the  previous  acquisition  of  skill  by  the  executives. 

The  third  includes  a  definite  allotment  of  responsibility  and 
the  adequate,  stimulative  encouragement  and  reward  of  both 
executive  and  productive  labor;  the  development  of  contented 
workers,  and  the  promotion  of  their  physical  and  mental  health. 
It  implies  the  most  thorough  comprehension  of  the  human  being. 

15.  Methods  of  the  Science  of  Management. — In  the  first 
edition  of  this  book  the  writer  outlined  the   methods  of  the 
industrial  engineer  as  follows: 

He  considers  a  manufacturing  establishment  just  as  one 
would  an  intricate  machine.  He  analyzes  each  process  into 
its  ultimate,  simple  elements,  and  compares  each  of  these  simplest 


12        FACTORY  ORGANIZATION  AND  ADMINISTRATION 

steps  or  processes  with  an  ideal  or  perfect  condition.  He  then 
makes  all  due  allowances  for  rational  and  practical  conditions 
and  establishes  an  attainable  commercial  standard  for  every 
step.  The  next  process  is  that  of  attaining  continuously  this 
standard,  involving  both  quality  and  quantity,  and  the  inter- 
locking or  assembling  of  all  of  these  prime  elements  into  a  well- 
arranged,  well-built,  smooth-running  machine.  It  is  quite 
evident  that  work  of  this  character  involves  technical  knowledge 
and  ability  in  science  and  pure  engineering,  which  do  not  enter 
into  the  field  of  the  accountant.  Yet  the  industrial  engineer 
must  have  the  accountant's  keen  perception  of  money  values. 
His  work  will  not  be  good  engineering  unless  he  uses  good 
business  judgment.  He  must  be  able  to  select  those  mechanical 
devices  and  perfect  such  organization  as  will  best  suit  present 
needs  and  secure  prompt  returns  in  profit.  He  must  have 
sufficiently  good  business  sense  to  appreciate  the  ratio  between 
investment  and  income.  He  must  be  in  close  enough  touch 
with  the  financial  management  to  be  able  to  impress  upon  them 
the  necessity  of  providing  sinking  funds  to  provide  for  the  more 
perfect  installations  and  organizations  which  future  demands  of 
a  more  educated  and  enlightened  public  will  necessitate. 

The  industrial  engineer  to-day  must  be  as  competent  to  give 
good  business  advice  to  his  corporation  as  is  the  skilled  corpora- 
tion attorney.  Upon  his  sound  judgment  and  good  advice 
depend  very  frequently  the  making  or  losing  of  large  fortunes. 

The  recognition  of  industrial  engineering  as  a  distinct  field 
of  engineering  has  become  an  established  and  permanent  fact  as 
evidenced  by  such  strong  and  prominent  organizations  as  the 
Society  of  Industrial  Engineers  and  the  Taylor  Society.  The 
latter  was  originally  organized  under  the  name  of  the  Society 
to  Promote  the  Science  of  Management  but  changed  its  name  in 
honor  of  Dr.  Frederick  W.  Taylor  after  his  death.  Still  further 
recognition  of  industrial  engineering  as  a  distinct  field  of  engineer- 
ing is  evidenced  by  the  increasing  number  of  colleges  and  univer- 
sities establishing  departments  of  industrial  engineering  and 
distinct  courses  in  industrial  engineering.  These  courses  have 
been  designated  in  some  colleges  as  courses  in  engineering  ad- 
ministration and  involve  a  great  deal  more  than  one  or  two  series 
of  lectures  on  industrial  management.  They  usually  cover 
separate  classes  in  charge  of  specialist  professors  teaching  such 
subjects  as  cost  accounting,  time  study,  functional  control  in  the 
shop,  personnel  management,  and  factory  layout  and  equipment. 


THE  PRINCIPLES  OF  INDUSTRIAL  MANAGEMENT          13 

16.  Taylor's  Definition  of  the  Methods  of  Industrial  Manage- 
ment.— Fred  W.  Taylor  summarizes  the  methods  of  industrial 
management  as  follows: 

(1)  The  Establishment  into  Scientific  Form  of  all  of  the  Working 
Data  and  Rule  of  Thumb  Knowledge  Relating  to  a  Given  Industry. — 
As  an  example  of  the  practical  application  of  this  method  we 
have  Mr.  Taylor's  own  exhaustive  treatise  on  "  The  Art  of  Cutting 
Metals." 

(2)  The  Scientific  Study  of  the  Workers.— To  illustrate  what 
sort  of  investigation  this  involves  we  may  again  refer  to  Mr. 
Taylor's  investigations  as  to  the  physical  and  temperamental 
qualifications  of  men  best  adapted  to  such  work  as  shoveling 
iron  ore,  carrying  pig  iron,  etc. 

(3)  Bringing  the  Science  to  the  Worker. — This  is  accomplished 
through  the  medium  of  functional  foremanship.     Each  functional 
foreman  is  an  expert  teacher  in  his  speciality. 

(4)  The  Assumption  by  the  Management  Itself  of  Its  Due  Share 
in  the  Above-mentioned  Three  Divisions. 

REFERENCES 

CHEYNEY:  "Industrial  and  Social  History  of  England,"  Chapters  II-IX. 
COMAN:  "Industrial  History  of  the  United  States,"  Chapters  II-IX. 
DAY:  "History  of  Commerce,"  Part  IV. 

WRIGHT:  "Industrial  Evolution  of  the  United  States."  Parts  I,  II  and  IV. 
GOING:  "Principles  of  Industrial  Engineering,"  Chapters  I  and  II. 
Transactions  A.  S.  M.  E.,  1912.     Report  of  Committee  on  Present  State 
of  Industrial  Management:  No.  1378,  pp.  1131-1229. 

Tuck  School  Conference  on  Scientific  Management:  pp.  28-35. 


CHAPTER  II 
INDUSTRIAL  FINANCE 

17.  The  Corporation. — The  present-day  theory  of  a  corpora- 
tion is  that  it  is  an  organized  body  of  individuals  who  have 
agreed  to  co-operate  in  the  conduct  of  some  enterprise  in  accord- 
ance with  federal  and  state  laws  as  well  as  certain  by-laws  made 
by  themselves.    This  theory  is  quite  different  from  that,  of  the 
previous   generation   which   held   that   a    corporation   was   an 
intangible,  invisible,  entity,  with  perpetual  existence,  otherwise 
having  all  the  attributes  of  a  natural  person.    The  present-day 
theory  of  the  corporation  does  not  segregate  the  directors  and 
stockholders    from    the    invisible    and    frequently    well-named 
soulless  mystery  the  corporation  itself.    To-day  the  officers,  the 
directors  and  the  stockholders  are  themselves  the  corporation. 
The  acts  of  the  corporation  are  the  acts  of  the  directors  and  their 
agents.    Inasmuch  as  the  directors  are  the  agents  of  the  stock- 
holders, the  stockholders  are  responsible  for  the  acts  of  the 
directors  in  so  far  as  the  directors  are  acting  within  the  limits  of 
the  authorization  conferred  on  them  by  the  stockholders  them- 
selves.   The  fact  that  the  courts  are  interpreting  more  and  more 
the  corporation  as  a  body  of  individuals  each  of  whom  shares  in 
the  responsibility  for  the  acts  of  the  corporation  itself  should 
serve  as  a  warning  to  stockholders,  directors,  and  responsible 
officials  in  all  corporations  to  exercise  care  and  forethought  in 
seeing  that  there  can  be  no  charge  substantiated  that  any  acts 
of  the  corporation  violate  common  law,  statutory  law  or  public 
policy.    The  commission  of  such  acts,  according  to  present-day 
intrepretation  of  the  courts,  involves  not  only  the  intangible, 
invisible  thing  known  as  the  corporation  but  may  mean  civil 
and  even  criminal  action  against  the  individuals  composing  the 
corporation  as  well  as  those  individuals  in  particular  responsible 
for  such  acts. 

18.  The  Corporation  Charter. — Incorporation  is  secured  by 
the  granting  of  a  charter.     This  charter  is  usually  granted  by  the 
office  of  the  secretary  of  state  of  the  state  in  which  incorporation 

14 


INDUSTRIAL  FINANCE  15 

is  sought,  after  the  publication  of  the  application  for  a  stated 
time  in  certain  newspapers.  In  its  ordinary  form  the  charter  is 
furnished  by  the  office  of  the  secretary  of  state  in  brief  standard 
printed  form  which  refers  to  the  act  or  acts  of  the  legislature  and 
also  sometimes  to  the  constitution  of  the  state  issuing  the 
charter,  as  specifying  in  further  detail  the  terms  under  which  the 
charter  is  granted.  This  standard  printed  form  of  charter  is, 
however,  not  the  only  form  of  charter  issued.  Certain  large 
corporations,  in  order  to  secure  the  widest  freedom  of  action 
possible,  have  had  their  attorneys  prepare  charters  so  worded  as 
not  to  conflict  with  the  laws  of  the  state  in  which  incorporation 
is  sought,  but  securing  a  wider  range  of  possible  activities  than 
would  be  expressly  stated  in  the  standard  form  of  charter.  Appli- 
cations for  special  forms  of  charter  thus  prepared  have  usually 
been  granted,  although  the  question  has  been  raised  by  outsiders 
whether  the  wide  scope  of  activities  allowed  in  some  cases  is  in 
accordance  with  the  interest  of  public  policy. 

19.  Where  to  Incorporate. — The  natural  place  for  an  indus- 
trial organization  to  incorporate  would  seem  to  be  the  state  in 
which  its  plant  is  located,  or,  if  it  operates  plants  in  several  states, 
the  state  in  which  its  principal  plant  is  located.  There  is  a 
certain  prestige  gained  by  being  known  as  a  home  industry 
rather  than  a  foreign  corporation,  the  word  " foreign"  being  used 
in  the  sense  of  belonging  to  another  state.  Incorporation  in 
the  home  state  might  involve  the  acquisition  of  a  certain  amount 
of  good  will  from  the  people  at  large  of  that  state.  Again  there 
is  a  tendency  in  some  states  to  license  or  tax  foreign  corporations 
and  exempt  home  corporations  from  such  licenses  or  taxes. 

Certain  states  limit  the  powers  of  corporations  so  far  as  the 
scope  of  their  business  activities  is  concerned  more  than  other 
states  and  this  may  be  a  deciding  factor  in  selecting  the  state  in 
which  to  incorporate.  Again  the  cost  of  the  charter  varies  in 
different  states.  Certain  states  which  grant  special  privileges  to 
corporations  levy  a  heavy  tax  in  the  form  of  incorporation  fee, 
while  other  states,  which  are  more  strict  with  regard  to  privileges 
allowed  corporations,  charge  a  relatively  small  fee.  The  form 
of  capitalization  desired  may  decide  the  selection  of  the  state 'in 
which  to  incorporate.  The  conservative  and  closely  held 
corporation  may  choose  to  issue  but  one  kind  of  capital  stock  and 
sell  this  stock  for  cash  only.  Such  a  corporation  can  afford  to 
incorporate  in  the  state  in  which  its  plant  is  located  no  matter 


16         FACTORY  ORGANIZATION  AND  ADMINISTRATION 

how  strict  may  be  the  corporation  laws  of  that  state.  On  the 
other  hand  a  corporation  may  wish  to  issue  stock  in  exchange  for 
property  contributed  by  subscribers  or  in  exchange  for  services 
rendered  by  promoters.  Certain  states  are  more  liberal  than 
others  with  reference  to  the  matter  of  allowing  stock  to  be  issued 
for  such  things  as  property,  services,  patent  rights,  bonus,  good 
will,  franchise,  etc.,  than  other  states.  Again  some  states  allow 
corporations  to  buy  and  sell  stocks  of  other  corporations,  while 
other  states  prohibit  this.  The  conservative  corporation  has 
everything  to  gain  by  incorporating  under  laws  of  a  state  which  is 
strict  and  has  nothing  to  gain  by  incorporating  under  the  laws 
of  a  state  having  so-called  liberal  corporation  laws.  .  On  the  other 
hand  there  are  many  successful  corporations  which  have  been 
organized  by  capable  business  men  who  had  very  little  money 
themselves  to  start  out  with  and  who  it  is  claimed  could  never 
have  capitalized  their  businesses  if  they  had  been  compelled  to 
conform  to  the  corporation  laws  of  some  of  the  stricter  states. 

20.  Governmental  Control  of  Corporations; — So  far  as  their 
intra-state  business  is  concerned,  namely  the  business  entirely 
within  the  state  in  which  they  are  incorporated,  corporations  are 
subject  to  (a)  the  terms  of  the  charter  under  which  they  are 
operating;  (b)  the  by-laws  adopted  by  the  stockholders;  (c)  the 
constitution  of  the  state;   (d)  the  statutes  of  that  state;   (e) 
common  law;  (f)  public  policy.     So  far  as  inter-state  acts  of 
corporations  are  concerned  they  are  subject  to  (a)  the  federal 
constitution,  (b)  the  federal  statutes  and  (c)  the  interpretation 
by  the  federal  courts  of  questions  as  to  whether  they  are  violating 
common  law  or  public  policy.    It  has  been  frequently  urged  that 
all  corporations  doing  inter-state  business  should  be  subject  to 
federal  incorporation.    Advocates  of  federal  incorporation   are 
hoping  that  the  confidential  data  accumulated  by  the  federal 
government  in  connection  with  the  federal  corporation  tax  as 
well  as  the  principle  of  federal  control  carried  with  the  act,  may 
open  the  way  for  the  construction  of  such  a  federal  incorporation 
act. 

21.  State  Corporation  Commissions. — The  establishment  of  cor- 
poration commissions  in  various  states  to  pass  on  the  soundness 
of  the  financial  plans  of  corporations  seeking  to  sell  their  securities 
and  to  determine  whether  these  companies  shall  be  allowed  to  sell 
their  securities  in  that  state  or  not,  is  another  recent  phase  of 
governmental  control.     These  commissions  have  been  designated 


INDUSTRIAL  FINANCE  17 

in  popular  parlance  as  "blue  sky  commissions"  for  the  reason 
that  corporations  having  very  little  tangible  property  to  show 
back  of  the  securities  they  are  offering  have  been  designated  as 
"blue  sky  companies." 

Popular  demand  to-day  is  for  the  establishment  of  corpora- 
tion commissions  in  the  states,  who  shall  look  after  the  interests 
of  the  investor  and  consumer  as  well  as  the  just  rights  of  incorpo- 
rators  and  apply  a  uniform  standard  to  all  in  questions  of  ap- 
praisal of  the  value  of  tangible  and  intangible  assets  for  which 
securities  are  proposed  to  be  issued. 

The  valuation  of  corporation  assets  by  a  commission  would  be 
desirable  from  the  standpoint  of  the  investor  and  consumer  in 
such  cases  as  the  following: 

A  has  a  business  actually  worth  $10,000.  He  agrees  with 
B  that  B  shall  put  in  $10,000  cash  and  secure  a  half  interest  in  a 
company  which  is  to  be  incorporated  with  $30,000  paid  up  stock 
on  the  following  plan.  An  appraisal  committee  is  to  prepare  an 
inventory  showing  the  value  of  A's  business  as  $20,000  instead 
of  its  real  value  of  $10,000.  The  corporation  will  buy  from  A 
hie  business  for  $20,000  worth  of  stock.  B  subscribes  for  $10,- 
000  worth  of  stock  and  pays  for  it  in  cash.  A  secret  contract 
is  made  by  A  and  B  whereby  A  agrees  to  transfer  to  B  $5000 
worth  of  stock  apparently  for  cash  at  par  value.  B  agrees  to 
write  out  a  check  in  favor  of  A  for  $5000,  A  is  to  get  this  check 
cashed  and  is  to  return  the  cash  immediately  back  to  B.  The 
paper  records  show  that  B  has  paid  par  value  in  cash  for  his 
original  $10,000  worth  of  stock,  also  that  he  paid  A  par  value 
in  cash  as  per  bank  account  and  checks  which  can  be  shown  for 
his  additional  $5000  worth  of  stock.  A  and  B  now  each  own 
$15,000  worth  of  stock  which  has  cost  each  of  them  only  $10,000 
and  they  are  in  a  position  to  sell  stock  at  a  profit  to  minority 
stockholders.  The  figures  and  conditions  of  the  hypothetical 
case  given  can,  and  usually  are  adjusted  to  suit  any  particular 
case  under  existing  corporation  laws.  A  strict  corporation 
commission  with  capable  appraisers  might  prevent  A  from  having 
his  business  appraised  at  more  than  $10,000  valuation.  It  is 
apparent,  however,  that  to  secure  such  results  the  commission 
would  have  to  be  absolutely  non-political  and  provided  with  a 
sufficiently  large  and  capable  force  of  appraisers  to  do  its  work 
thoroughly. 

22.  Organization  Prior  to  Incorporation. — The  real  organiza- 


18         FACTORY  ORGANIZATION  AND  ADMINISTRATION 

tion  of  most  corporations  is  planned  or  " slated"  prior  to  the  first 
subscribers'  meeting.  The  promoters  get  together  and  deter- 
mine what  shall  be  their  compensation,  who  shall  be  the  directors 
and  officers,  what  shall  be  the  by-laws,  how  the  stock  shall  be 
allotted  in  the  case  of  over-subscription,  what  course  shall  be 
followed  in  case  of  under-subscription,  and  many  other  details, 
which  are  apparently  solved  by  the  free  action  of  the  subscribers 
at  the  first  meeting.  At  the  first  meeting  somebody  usually 
nominates  a  temporary  chairman  as  previously  agreed  on. 
This  motion  is  usually  unanimously  carried.  Then  the  temporary 
secretary  is  nominated  and  usually  unanimously  elected.  Next 
a  motion  is  made  that  the  chairman  appoint  a  nominating  com- 
mittee to  nominate  officers.  This  motion  is  also  usually  carried. 
It  has  been  advocated  that  statutes  should  be  passed  providing 
a  set  of  rules  governing  the  conduct  of  subscribers'  meetings. 
Such  statutes  would  be  very  desirable,  as  under  existing  condi- 
tions promoters  claim  that  there  is  no  law  which  requires  even 
the  usually  accepted  rules  of  parlimentary  procedure  to  be  fol- 
lowed in  conducting  a  subscribers'  meeting.  For  instance  if 
one  of  the  subscribers  ventured  to  move  that  the  nominating 
committee  be  elected  by  ballot  or  that  directors  be  nominated 
by  petition  and  elected  by  ballot  the  temporary  chairman  could 
simply  declare  such  a  motion  out  of  order  and  declare  in  order 
only  such  motions  as  are  made  by  the  promoters  in  accordance 
with  the  agreed  program. 

23.  Capitalization. — The   simplest   form   of   capitalization    is 
that  in  which  there  is  only  one  kind  of  stock,  the  shares  of  which 
have  been  paid  for  in  cash  at  par  value.    This  simplest  form, 
however,  is  less  usual  in  the  present  generation  than  formerly. 
The  requirements  of  modern  industrial  undertakings  for  large 
working  capital,  and  expensive  plants  and  equipment  have  made 
it  necessary  for  the  industrial  corporation  established  in  recent 
years  to  pattern  itself  somewhat  after  the  railroad  in  its  methods 
of  capitalization. 

24.  Bonds. — Industrial  bonds  are  at  present  confined  almost 
exclusively  to  first  mortgage  bonds  secured  by  real  estate  and 
plant.    It  frequently  happens  that  the  citizens  of  a  town  desirous 
of  securing  an  industrial  plant  will  donate  the  ground  and  sub- 
scribe locally  for  first  mortgage  bonds  of  a  sufficient  amount  to 
put  up  either  the  buildings  alone  or  the  buildings  and  equip- 
ment.   In  such  cases  a  contract  can  be  made  between  the  bond- 

2 


INDUSTRIAL  FINANCE  19 

holders  and  the  corporation  regulating  the  amount  that  is  to  be 
set  aside  per  unit  of  product  to  meet  interest  on  bonded  indebted- 
ness and  to  provide  a  sinking  fund  for  paying  off  the  bonds. 
For  instance,  in  the  case  of  an  automobile  factory  the  contract 
printed  on  the  bond  might  specify  that  $20.00  per  car  is  to  be 
set  aside  for  every  car  sold,  to  meet  the  interest  and  sinking 
fund  requirements  on  the  bond  issue. 

Equipment  bonds  and  debenture  bonds  have  not  as  yet  been 
employed  to  any  extent  in  industrial  undertakings.  It  is  possible 
that  the  future  may  see  their  more  extensive  use  in  this  field. 

25.  Preferred  Stock. —Preferred  stock   has  priority  of   claim 
over  the  common  stock  in  sharing  any  profits.    Formerly  pre- 
ferred  stock  was  usually  non-voting  stock.    A  good  deal  of 
preferred  stock  in  recent  years  however  is  voting  stock.    In 
some  cases  it  becomes  voting  stock  only  if  the  dividend  on  the 
preferred  stock  has  not  been  paid.    It  is  becoming  the  custom 
to  limit  the  amount  of  preferred  stock  issued  by  industrial 
corporations  to  a  figure  which  fairly  represents  the  value  of 
unburdened  tangible  assets.    For  instance  if  the  real  estate  and 
buildings  were  covered  by  a  mortgage  securing  a  bond  issue,  and 
if  the  equipment  were  not  so  burdened,  then  the  preferred  stock 
issue  might  represent  the  value  of  the  equipment,  the  raw  mate- 
rial on  hand,  work  in  process  in  the  shops,  and  the  finished  stock 
on  hand.    Industrial  preferred  stocks  usually  pay  a  rate  of  divi- 
dend from  1  to  2  per  cent,  per  annum  higher  than  the  bonds. 
In  some  cases  it  may  not  be  necessary  to  issue  both  bonds  and 
preferred  stock.    Under  such  circumstances  the  bond  issue  has 
the  advantage  of  being  more  easily  marketed  and  paying  a  lower 
rate  of  interest  than  would  have  to  be  paid  on  a  preferred  stock. 
On  the  other  hand  preferred  stock  if  it  is  non-cumulative  does 
not  carry  with  it  the  same  obligation  to  pay  the  dividend  every 
year  as  is  involved  in  the  compulsion  to  pay  the  interest  on  the 
bonds.  Most  industrial   corporations,  however,   make   extreme 
efforts  to  pay  dividends  on  their  preferred  stock  as  the  failure  to 
pay  such  dividends  always  results  in  a  sharp  decline  of  the 
market  value  of  all  securities  of  the  corporation.    If  the  pre- 
ferred stock  is  cumulative,  any  dividend  which  has  not  been 
paid  in  any  one  year  remains  as  an  obligation  to  be  paid  out  of 
future  profits  before  any  dividend  can  be  paid  on  the  common 
stock. 

26.  Common  Stock. — Common  stock  is  in  most  cases  the  only 


20         FACTORY  ORGANIZATION  AND  ADMINISTRATION 

voting  stock.  The  conservative  industrialist  sometimes  prides 
himself  on  the  fact  that  his  company  has  issued  but  one  kind  of 
stock,  namely,  common  stock.  It  is  difficult  under  present-day 
methods  of  finance  to  dispose  of  common  stock  at  par  for  cash, 
in  view  of  the  widespread  custom  of  using  common  stock  as  a 
bonus  to  be  given  away  to  subscribers  to  bonds  or  preferred 
stock  of  new  corporations. 

What  relation  may  the  amount  of  common  stock  bear  to  other 
securities  issued?  The  conservative  method  of  issuing  common 
stock  is  to  retain  as  unissued  stock  a  sufficient  quantity  of 
authorized  common  stock  so  that  the  total  outstanding  securities 
of  all  kinds  will  not  exceed  the  total  volume  of  business  done  in 
a  year  representing  an  average  condition  of  trade.  Under  such 
circumstances  the  profits  on  a  year's  business  should  be  ample 
to  pay  interest  and  sinking  fund  requirements  on  the  bond  issue, 
as  well  as  dividends  on  the  preferred  and  common  stock  and 
permit  some  allotment  of  undivided  profit  to  a  surplus  fund. 
Take  for  example  an  industrial  corporation  doing  a  business  of 
$1,000,000  worth  of  sales  a  year.  We  might  reasonably  expect 
that  after  all  production  costs  and  expenses  were  met,  together 
with  all  selling  and  office  expenses  outside  of  officers'  salaries,  a 
favorable  balance  of  $100,000  would  be  left.  This  $100,000 
would  have  to  be  utilized  to  pay  interest  and  sinking  fund  on 
bonds,  interest  on  stock,  officers'  salaries  and  leave  some  surplus 
on  hand,  approximately  as  follows: 

Interest  at  6  per  cent,  on  $100,000  bonds $6,000 

Sinking  fund 4,000 

Dividend  at  7  per  cent,  on  $300,000  preferred  stock 21,000 

Dividend  at  6  per  cent,  on  $600,000  common  stock 36,000 

Surplus  or  depreciation  fund 3,000 

Total  exclusive  of  officers'  salaries 70,000 

Balance  left  for  officers'  salaries $30,000 

The  above  figures  are  not  very  far  out  of  the  ordinary  for  a 
$1,000,000  concern.  One  does  not  have  to  do  much  figuring  to 
demonstrate  that  a  concern  with  $1,000,000  capitalization  can- 
not afford  to  pay  more  than  about  three  $10,000-a-year  salaries 
to  officers,  unless  the  profits  on  the  business  are  abnormally  high. 

It  is  frequently  attempted  to  controvert  such  figures  as  the 
above  by  the  statement  that  certain  officers  who  are  receiving 
salaries  of  from  $10,000  to  $25,000  per  year  are  actual  producers 


INDUSTRIAL  FINANCE  21 

in  that  ^hey  are,  as  the  case  may  be,  exceptionally  capable 
financiers,  organizers,  managers,  designers,  or  sales  managers, 
and  that  their  salaries  should  be  considered  as  part  of  the  cost 
of  production.  Such  arguments  are  not  so  easily  met  where  the 
industry  in  question  is  a  natural  or  artificial  monopoly.  But 
where  there  is  competition,  either  domestic  or  foreign,  the  cost 
of  the  output  and  salaries  paid  for  equivalent  service  are  deter- 
minable.  Exorbitant  salaries  to  officers  and  to  favored  stock- 
holders have  not  been  recognized  until  quite  recently  as  one  of 
the  greatest  obstacles  to  American  trade  supremacy  and  to  the 
proper  distribution  of  the  benefits  of  the  science  of  industrial 
management. 

The  years  1915  to  1920  show  a  far  greater  increase  each  year 
in  the  total  outstanding  capital  stocks  and  other  securities  of 
corporations  as  compared  with  the  increase  of  tonnage  of  coal 
and  steel  and  bushels  of  grain  and  similar  actual  production. 
Since  the  latter  are  after  all  the  real  measure  of  the  increase  in 
the  world's  wealth,  the  exorbitant  increase  in  outstanding  capitali- 
zation will  sooner  or  later  be  recognized  as  a  harmful  element  in 
diminishing  the  purchasing  value  of  a  dollar  and  in  increasing 
the  cost  of  living — an  element  of  as  great  importance  as  under- 
production or  profiteering.  A  comparison  of  statistics  published 
by  Babson  or  Bradstreet  of  production  measured  in  the  concrete 
of  products  as  compared  with  the  increase  of  capitalization, 
presents  the  case  very  clearly. 

27.  Depreciation. — Depreciation  of  plant  and  equipment  is  a 
loss  incurred  every  year.  Inasmuch  as  losses  and  assets  are 
listed  on  the  same  side  of  the  balance  sheet  it  is  important  to 
discriminate  between  an  item  which  shows  depreciation  as  a 
loss  and  an  item  which  shows  a  depreciation  fund  in  the  form  of 
a  bank  account,  or  securities  purchased  to  offset  this  loss.  In 
order  to  make  the  matter  clear  it  is  always  well  to  specify  after 
the  words  "  depreciation  fund"  the  form  which  this  fund  takes. 
Writing  down  the  word  "  depreciation"  only,  without  specifying 
the  nature  of  the  fund  might  lead  a  reader  to  believe  that  no 
actual  fund  existed  and  that  the  depreciation  was  merely  a  loss. 

Depreciation  cannot  be  satisfactorily  determined  by  the  use 
of  arbitrary  tables.  In  a  given  industry  each  type  of  plant  and 
equipment  has  a  determinable  period  of  useful  active  life.  At 
the  end  of  this  period  the  plant  or  equipment  has  also  some 
residual  value,  as  scrap  or  second-hand  outfit.  To  determine 


22         FACTORY  ORGANIZATION  AND  ADMINISTRATION 

the  depreciation,  subtract  the  residual  value  from  the  initial 
cost.  To  distribute  this  depreciation  by  annual  allotments  over 
the  period  of  useful  active  life  is  not  so  easy  as  would  at  first 
sight  appear.  One's  first  thought  is  that  if  we  divide  the  total 
depreciation  by  the  number  of  years  of  useful  life  we  would  have 
the  annual  depreciation.  We  need  to  bear  in  mind,  however, 
that  depreciation  funds  invested  in  securities  are  accumulating 
interest.  Hence  we  need  to  determine  from  annuity  tables  the 
amount  to  be  set  aside  each  year  in  order  to  net  us  at  the  end  of 
the  period  of  useful  life  the  total  depreciation  sum. 

The  ultra-conservative  enterprise  with  plenty  of  funds  may 
invest  such  sums  in  bank  or  in  securities.  The  argument  against 
this  practice  is  that  the  business  itself  must  yield  more  profits 
than  such  investments.  Hence  the  depreciation  reserve  it  is 
argued  is  best  reinvested  into  tangible  assets  of  the  business, 
preferably  equipment.  If  this  is  the  form  of  investment,  the 
question  arises  as  to  whether  the  annual  amount  of  depreciation 
shall  be  considered  as  (a)  the  quotient  of  the  total  depreciation 
divided  by  the  period  of  useful  life,  or  an  annuity  table  sum  based 
on  (b)  ordinary  savings  bank  interest  rates,  or  (c)  the  average 
dividend  rate  of  the  given  business.  Evidently  (a)  is  the  most 
conservative  and  (c)  the  least  conservative  practice. 

Depreciation  must  be  recognized  as  something  which  happens 
every  year  and  must  be  met.  It  is  an  obligation  which  cannot 
be  shifted  from  one  year  to  the  next  in  anticipation  of  a  year  of 
good  profits.  Auditors  and  critical  investors  are  paying  more 
and  more  attention  to  the  manner  in  which  a  corporation  manage- 
ment provides  for  distribution  as  one  of  the  important  means  of 
gauging  the  integrity  and  stability  of  the  corporation  in  question. 

REFERENCES 

LOUGH:  "Corporation  Finance,"  Chapters  I-XIV. 
COOPER:  "Financing  an  Enterprise,"  Parts  I-IV. 
BENTLEY:  "Corporate  Finance  and  Accounting,"  Chapter  I. 
CONYNGTON:  "The  Modern  Corporation,"  Chapters  I -XII. 
SULLIVAN:  "American  Corporations,"  Chapters  I-VII. 
ENNIS:  "Works  Management,"  Chapter  VII. 

HUMPHREYS:  "Lecture  Notes  on  Business  Engineering,"  Pages  258-318, 
53-61,  29-39. 

HATFIELD:  "Modern  Accounting,"  Chapter  VII. 
COLE:  "Accounts,"  Chapter  VIII. 


CHAPTER  III 
ORGANIZATION  AND  CONTROL 

28.  Organization. — Organization  consists  of  the  laying  out  of 
the  scope  and  limits  of  action  of  the  various  individuals  and 
groups  of  individuals  whose  work  is  required  for  carrying  on  the 
objects  of  the  establishment.     It  consists  further  of  the  uniting 
of  these  individuals  and  groups  of  individuals  in  such  a  manner 
as  to  co-operate  for  the  common  good,  harmoniously,  promptly, 
and  economically.     There  is  no  greater  source  of  economy  than 
conservation  of  human  energy  through  efficient  organization. 
To  obtain  the  largest  possible  return  from  a  given  expenditure 
of  capital  and  labor,  the  industrial  organization  must  be  logical, 
systematic   and   scientific.     A   well-designed   organization   will  \_ 
do  much  to  bring  about  mutual  confidence  and  co-operation. 
The  confidence  of  the  men  must  be  obtained.    They  must  ap- 
preciate that  it  is  to  their  own  interests  as  well  as  to  the  interests 
of  the  community  and  stockholders  to  deliver  the  right  kind  of 
work.     The  right  kind  of  organization  will  do  much  toward 
developing  the  right  sort  of  industrial  intelligence  among  all  the 
working  men,  a  factor  of  more  importance  than  superlative  refine- 
ments in  the  testing  department. 

29.  Organization  Something  Distinct  from  Management  and 
System. — Organization  is  distinct  from  system  and  management. 
An   industrial    establishment   may   have   excellent    filing   and 
accounting  systems,  but  no  well-defined  lines  of  organization. 
Again  there  may  be  clearly  defined  organization,  but  very  poor 
management.     The  distinction  between  organization,  manage- 
ment, and  system  is  important,  and  must  be  fully  appreciated. 
We  organize  to  manage.     We  manage  largely  through  system. 
We  manage  successfully  when  we  apply  not  only  the  principles 
fundamental   to    correct   organization   and   system,    but   when 
we  take  into  account  all  the  principles  and  methods  of  industrial 
management.     Some    enthusiasts    on    industrial    and    business 
psychology  while  recognizing  the  importance  of  dealing  correctly 
with  the  human  factor  in  works  management,  do  not  lay  enough 

23 


24         FACTORY  ORGANIZATION  AND  ADMINISTRATION 

stress  on  the  other  basic  principles  and  methods  of  industrial 
management.  Management  is  the  whole,  of  which  organization, 
system,  industrial  psychology,  and  other  elements  and  methods 
are  parts. 

30.  System. — There  is  a  pronounced  tendency  by  consulting 
experts  to  lay  the  greatest  emphasis  on  certain  methods  of  analy- 
sis and  synthesis  and  certain  peculiar  forms  of  record  and  equip- 
ment.    Certain  experts  have  gathered  together  certain  peculiar* 
methods  and  have  added  to  them  certain  principles  of  manage- 
ment, and  then  dubbed  the  whole  the  "  Blank  System  of  Manage- 
ment."    Proprietors  who  have  seen  the  benefits  gained  by  certain 
of  these  methods  and  systems  in  their  particular  industries  are 
enthusiastic   in   their   praise   and    advocacy   of   them.     These 
methods  and  systems  where  they  have  been  successful,  are  as 
deserving  of  praise  and  reward  as  great  mechanical  inventions. 
But  it  must  be  borne  in  mind  that  if  we  are  endeavoring  to 
formulate  basic  principles  of  the  science  of  management,  they 
are  merely  illustrative  factors.     To  illustrate  specifically,  Mr. 
Carl  Barth  has  invented  a  remarkable  slide-rule  for  determining 
the  best  methods  of  metal  removal  by  machine  tools.     Mr. 
Sanford   Thompson   has   invented   a  high-grade  decimal  stop- 
watch.    Both  of  these  gentlemen  are  as  much  authorized  to 
speak  of  their  methods  as  the  Barth  System  or  the  Thompson 
System,  as  certain  men  who  have  attached  their  names  to  methods 
and  systems  which  they  designate  as  "  Systems  of  Management." 
Both  of  the  gentlemen  in   question,    however,    recognize  that 
while  there  may  be  a  science  of  management,  it  would  be  as 
incorrect  to  speak  of  a  system  of  management,  as  it  would  be  to 
speak  of  a  system  of  economics,  or  a  system  of  psychology. 
Even  Dr.  Taylor,  who  has  done  more  than  any  one  individual  in 
establishing  the  principles  and  methods  of  industrial  management 
on  a  scientific  basis,  prefers  the  term  " Scientific  Management" 
to    the    term    "The    Taylor    System."     Special    methods    and 
systems  represent  practices  based  on  a  foundation  of  centuries  of 
experience  by  earnest  men  in  actually  doing  the  world's  work. 

31.  Control. — To  lay  out  a  new  organization  or  to  analyze  an 
existing  organization  we  must  determine  first  the  processes  and 
classes  of  activity  required  of  plant,  equipment  alTd  individuals. 
This  demands  a  knowledge  of  all  the  interior  workings  of  an  in- 
dustrial establishment.     The  process  of  building  up  an  orgfhiza- 
tion  that  shall  be  the  best  for  a  certain  factory  depends  primarily 


ORGANIZATION  AND  CONTROL  25 

upon  scientific  research  work,  having  for  its  object  the  dissection 
of  the  entire  series  of  internal  workings  into  the  elementary  steps. 
We  must  list  these  in  detail.  Following  this  analytic  process 
comes  the  even  more  difficult  synthetic  one  of  preparing  a  struc- 
ture which  shall  be  the  most  efficient  possible  engine  of  industrial 
production  of  its  type.  We  must  determine  which  of  these  prime 
elements  are  to  stand  alone,  and  which  are  to  be  combined,  so 
that  the  general  result  will  make  a  well-arranged,  well-built, 
smooth-running  machine,  as  it  were,  of  the  entire  aggregation. 

Such  determination  requires  an  inspection  of  the  establishment 
with  a  view  to  determining  what  type  of  control  is  applicable 
to  its  various  branches.  Control  may  be  based  on  the  principle 
of  military  authority  as  exemplified  by  the  line  officers,  on 
specialization,  on  functionalization,  or  on  a  combination  of  dif- 
ferent degrees  of  two  or  more  of  these  principles.  Each  of 
these  principles  will  be  dwelt  on  in  further  detail. 

32.  Numerical-Military  Type. — The   numerical    type   of    de- 
partmentalization and  control,  sometimes  designated  as  the  mili- 
tary type,  divides  the  men  into  groups  in  such  a  manner  that  each 
group  receives  its  orders  and  instructions  of  all  kinds  from  one 
man  only.     In  this  type  in  its  extreme  form,  workmen  are  de- 
finitely instructed  that  in  all  matters  they  are  expected  to  receive 
and  obey  orders  from  their  gang  boss  only,  he  in  return  being 
responsible  only  to  the  assistant  foreman,  the  assistant  foreman 
to  the  foreman,  and  so  ^n.     In  its  modified  type,  instructions 
may  be  taken  from  any  line  officer  superior  in  rank.     This  modi- 
fied type  is  quitej3ossible  without  conflicting  orders. 

33.  Specialization. — The  principle  of  specialization  demands 
that  all  similar  duties,  handicrafts  "and*  trades  be  selected  and 
performed  by  one  man  or  group  of  men  so  far  as  processes  and 
classes   of   activity   permit.     The   departmental   division   then 
follows  processes,  trades,  handicrafts  and  classes  of  labor  and 
equipment.     The  principle  of  specialization  has  come  into  pretty 
general  application  even  in  conservative  establishments.     It  is 
exemplified  in  the  manufacturing  side  by  such  departments  as 
lathe,  automatic  screw  machine,  miller  department,  etc.,  and  in 
the  commercial  side  by  such  departments  as  correspondence, 
sales,  etc. 

Specialization  is  an  economic  necessity,  but  over-specialization 
is  to  be  avoided.  After  all  it  is  the  all-around  men,  the  versa- 
tile, widely  informed  department  heads,  who  form  the  vertebrae 


26         FACTORY  ORGANIZATION  AND  ADMINISTRATION 

of  the  backbone  of  a  successful  organization.  Among  laborers, 
mechanics  and  minor  bosses,  it  is  safe  and  proper  to  go  to  ex- 
treme limits  in  specializing,  but  among  those  who  are  to  fill  posts 
of  higher  responsibility,  we  should  avoid  drawing  the  lines  of 
specific  organization  with  prescribed  limitations  of  authority 
so  closely  as  to  thwart  ambition. 

This  desideratum  can  be  brought  about  by  grouping  allied 
specialized  departments  with  a  general  officer  as  the  head  of  the 
group.  Such  general  positions  afford  incentives  in  the  way  of 
promotion  to  specialists  and  also  provide  insurance  of  succession 
when  an  unexpected  vacancy  occurs.  It  is  impossible  to  foresee 
or  prepare  for  the  unexpected  vacancy  or  other  contingency 
which  will  demand  experience  in  exercising  independent  judgment 
and  all-around  knowledge  of  an  industry,  qualifications  which 
are  stifled  by  over-specialization  and  too  great  limitation  of  the 
powers  of  higher  officials. 

With  the  development  of  the  manufacturing  side,  we  begin 
to  have,  not  only  increased  departmentalization  by  handicrafts, 
trades  and  types  of  machinery,  but  we  have  as  a  rule  the  division 
of  metal  machine-shop  work  into  three  classes,  namely  tooling, 
group  assembly,  and  final  assembly  or  erecting.  Next  comes 
the  recognition  of  the  advantage  of  distinct  departments  of  works 
engineering  (including  power,  light  and  heat),  design  of  product, 
tool  designing,  stores,  orders,  shipping,  cost  and  other  factory 
accounts,  etc.  Many  organizations  have  developed  specialized 
departmentalization  without  the  development  of  the  principle  of 
functionalization. 

34.  Functionalized  Type. — This  term  is  used  to  designate  a 
type  of  control  in  which  there  is  delegated  to  a  staff  officer  or  de- 
partment, absolute  control  over  certain  features,  performances  or 
functions  common  to  all  departments  but  distinct  from  special- 
ized duties.  To  distinguish  between  specialization  and  func- 
tionalization we  may  define  a  specialist  as  aiTmdividual  who  is 
expert  in  a  certain  trade,  handicraft  or  science  which  is  an  essen- 
tial constituent  of  the  particular  industrial  process  of  the  given 
establishment.  A  functional  staff  officer  or  bureau,  on  the  other 
hand,  investigates  a  single  phase  or  aspect  common  to  all  these 
handicrafts,  trades  and  sciences. 

Functional  management  is  more  than  the  assignment  of  the 
one  function  to  a  specialist,  which  is  the  distinguishing  feature  of 
specialization.  v  Functionalization  determines  what  functions 


ORGANIZATION  AND  CONTROL  27 

come  into  play  in  managing  all  departments,  each  functional  head 
for  any  one  function  being  supreme  in  that  function  in  all 
departments. 

It  is  by  means  of  the  functional  departments  and  staff  officers 
that  the  efficient  modern  organization  best  accomplishes  the 
co-ordination  which  is  so  necessary  after  departmental  speciali- 
zation has  been  well  instituted.  Functional  organization  and 
control  which  does  away  altogether  with  line  control,  is  a  dis- 
tinguishing feature  of  Doctor  Taylor's  methods.  He  has 
three  functional  heads  in  what  he  designates  as  the  plan- 
ning department,  namely,  a  head  for  the  order-of-work  clerks, 
a  head  for  the  instruction-card  men  and  a  head  for  the  cost-and- 
time  clerks.  In  the  shop  side  he  has  four  functional  heads, 
namely,  the  gang  boss,  the  speed  boss,  the  inspector  and  the  re- 
pair boss.  An  eighth  functional  head,  namely,  the  shop  disci- 
plinarian, acts  in  the  capacity  of  arbitrator  of  all  differences. 
The  functional  men  in  the  planning-department  group  operate 
as  a  whole  through  the  head  of  the  " order-of-work"  clerks,  who 
is  the  medium  connecting  the  planning  room  with  the  shop  bosses 
and  through  them  with  the  mechanics  and  laborers  (see  Fig.  1). 

There  has  been  an  evolution  in  functional  control  so  that  while 
Fig.  1  represents  the  principle,  this  principle  is  actually  carried 
out  in  varied  ways.  Those  who  have  kept  in  close  contact  with 
the  evolution  of  functional  control  realize  that  recognition  is 
accorded  as  a  rule  to  the  two  major  classes  of  men,  which  may  be 
designated  as  the  analytic,  scientific  or  engineering  type  on  the 
one  hand  and  the  production,  result-getting,  following  instruc- 
tion type  on  the  other  hand. 

A  type  of  functional  control  which  may  be  applied  either  to  a 
business  as  a  whole  or  internally  in  any  department,  consists  of 
grouping  the  entire  activities  of  a  business  and  those  internally 
of  each  department,  under  five  functional  headings,  consisting  of 
Planning,  Preparation,  Scheduling,  Production,  and  Inspection. 
For  example,  in  functionalizing  a  general  organization,  under 
"Planning"  would  come  " Sales/ *  Advertising,  and  " Ware- 
house" departments;  under  "Preparation"  would  come  "Eng- 
ineering" and  the  activities  designated  in  the  Taylor  Chart  as 
under  "Planning;"  under  "Scheduling"  and  "Production" 
would  come  "Manufacturing,"  "Purchasing,"  and  "Personnel 
Service;"  under  "Inspection"  would  come  "Accounting," 
"Costs,"  "Statistics,"  and  "Auditing." 

35.  Selecting  Organization  and  Control. — It  would  be  very 
difficult  to  set  down  a  standard  type  to  apply  to  all  industrial 


28 


FACTORY  ORGANIZATION  AND  ADMINISTRATION 


establishments.  However,  it  is  quite  possible  to  present  a' 
conventional  general  type  of  combined  staff  and  line  control 
adaptable  with  modifications  to  most  industries.  This  con- 
ventional type  is  then  to  be  carefully  inspected  and  studied  by 
all  persons  who  are  to  lead  in  carrying  out  the  plans  for  organiza- 
tion prior  to  adopting  any  given  system.  In  deciding  on  what 
production,  cost  system,  or  wage  system  to  use,  it  should  be 
remembered  that  men  of  exceptional  ability  may  devise  systems 
of  exceptional  merit,  but  they  must  either  keep  personal  repre- 
sentatives of  high  ability  permanently  in  charge  of  those  systems, 
or  else  turn  them  over  to  average  proprietors  and  employees 
to  handle.  And  it  is  the  personal  inefficiency  of  the  average 


PLANNING 


PERFORMING 


*FiG.  1. — Chart  prepared  by  F.  B.  Gilbreth  to  illustrate  functional  control 
according  to  F.  W.  Taylor. 

proprietors  and  men  who  operate  the  systems  that  determines 
the  practical  limitations  of  their  usefulness.  No  system  should 
be  forced  onto  employees.  Their  co-operation  must  be  secured 
first. 

In  planning  a  new  organization,  meetings  should  be  called  of 
the  various  existing  officials  and  department  heads.  These 
meetings  should  be  continued  until  a  form  of  organization  has 
been  agreed  upon.  The  sum  total  of  the  knowledge  of  a  number 
of  intelligent  men  is  generally  greater  than  that  of  any  one  of 


ORGANIZATION  AND  CONTROL 


29 


them,  and  action  taken  by  an  executive  after  consultation  with 
the  leading  members  of  an  organization,  even  if  it  is  not  in  exact 
accord  with  majority  opinion  in  some  instances,  is  generally 
conservative  and  safe.  In  management,  and  particularly  in 
developing  an  organization  whose  function  it  is  to  manage, 
the  personal  equation  cannot  be  ignored. 

It  is  more  important  to  know  who  your  men  are,  how  they  are 
inter-related,  their  personal  peculiarities,  their  feeling  toward 
yourself  and  others,  and  the  political  organization  of  the  plant 


STAFF 

(SEE 

CHART  ) 

(        FIG.  3        ) 

CHIEF 
ENGINEER 


WAREHOUSE  SUPT. 
SHIPPING 


4-                              + 

I 

+ 

OKUEftS 
PLANS 
PREPARATION 
SCHEDULES 

STORES 
RECORDS 
FOLLOW  UP 
ON 
PURCHASES 

TIME    STUDIES 
TIME    RECORDS 
INVESTIGATION 
OF    COST   SERVICE 
DATA. 

INSPEC 

DESIGN  OF  ^ 
TOOLS  AND 
METHODS 


FIG.   2. — Chart    illustrating  line  features  of  line  and  staff  control  in  a 
large  industrial  organisation. 

as  a  whole,  than  to  know  the  intimate  details  of  production, 
although  the  latter  is  essential.  You  cannot  treat  any  two  men 
in  the  same  way  and  get  the  best  results  from  each  of  them.  The 
most  successful  organizer  and  manager  is  the  one  who  knows  his 


30         FACTORY  ORGANIZATION  AND  ADMINISTRATION 

assistants,  makes  allowances  for  their  peculiarities,  and  makes  it  a 
point  to  promote  personal  good  will  among  them. 

36.  Specific  Duties. — Specific  duties  must  be  clearly  set  forth 
not  only  for  each  group  of  individuals  and  various  departments, 
but  a  schedule  of  individual  responsibilities  and  routine  should 
be  prepared  for  the  use  of  each  individual  in  each  department. 
In  addition  to  defining  departmental  and  individual  duties,  the 
duties  of  groups  and  committees  must  be  listed.     Charts  and 
diagrams  should  be  prepared  to  show  responsibility  and  inter- 
relation of  various  departments,  officials  and  committees  of  the 
organization  as  a  whole.     Similar  departmental  charts  and  dia- 
grams should  be  prepared  for  the  various  departments  and  sub- 
departments.     Each   chart   should   be   supplemented   by   such 
extensive,  explicit,  detailed  instructions  as  are  required  to  make 
it  perfectly  clear. 

It  should  be  borne  in  mind,  however,  that  an  organization 
must  be  impersonal  and  must  be  built  up  along  the  lines  of 
specialization,  functionalization,  and  control,  and  not  along  the 
lines  of  individual  personal  abilities  of  present  incumbents  of 
positions. 

In  addition  to  charting  the  organization,  it  is  customary  to 
write  up  a  detailed  description  of  the  responsibilities  and  duties. 
This  is  designated  as  the  "  organization  recond."—  This  Is  supple- 
mented by  further  written  descriptions  of  the  operation  of 
systems.  These  descriptions  are  usually  designated  as  pro- 
cedures and  are  given  consecutive  numbers  so  that  they  can  be 
indexed  and  revised  and  easily  identified. 

37.  A    Comprehensive    Industrial    Organization. — Fig.    2    is 
presented  as  a  comprehensive  conventional  model  organization 
embodying  the  best   contemporary  features   of  staff   and   line 
control.     The  staff  functions  are  limited  to  research,  investiga- 
tion and  recommendation.     All  routine  is  carried  on  by  the  line 
departments.     It  is  strongly  urged  that  the  staff  be  organized 
as  distinct  from  the  men  having  to  deal  with  regular  routine, 
and  that  all  staff  bureaus  be  collectively  under  the  leadership 
of  an  industrial  engineer  as  head  of  staff  who  should  be  a  broadly 
educated  man.     We  might  designate  him  as  an  engineer-econo- 
mist, although  he  may  have  advanced  and  developed  through 
one  of  the  branches  of  the  organization  dealing  with  engineering 
accounts,  or,  on  the  other  hand,  through  a  department  dealing 
with  men,  or  one  dealing  with  machinery. 


ORGANIZATION  AND  CONTROL 


31 


Fig.  3  illustrates  the  proposed  staff  organization  under  four 
general  divisions,  namely:  (1)  Statistics;  (2)  Materials;  (3) 
Plant,  Equipment,  and  Processes;  (4)  System.  The  term 
"  Division "  is  used  to  emphasize  the  distinction  between  the 
staff  divisions  and  major  departments.  Briefly  outlined,  the 
functions  of  these  staff  divisions  are  as  follows : 

38.  Statistical  Division. — This  division,  like  all  of  the  staff 
divisions,  is  a  division  which  has  no  direct  disciplinary  control 
over  any  of  the  various  departments  which  keep  records.  It  is 


INDUSTRIAL  ENGINEER 

A  BROADLY  EDUCATED  MAN 

WELL  VERSED   IN  THE  SCIENCE  OF  MANAGEMENT 
IN  CHARGE  .-DIRECTS  RESEARCHES  AND  CONFERENCES 
BETWEEN  STAFF  AND  LINE. 


AN  ACCOUNTANT 

AN  ENGINEER  WHO   18 

AN    INDUSTRIAL 

SYSTEM  DESIGN  AND 

TRAINED  IN  THEORY  OF 

AN  EXPERT  IN  TESTING 

ENGINEER    IN   CHARGE, 

INSTALLATION. 

ACCOUNTS,   STATISTICS, 

MATERIALS  IN   CHARGE. 

THIS  BRANCH  OF 

PLANNING  OF  PROCEDURES 

GRAPHICAL  REPORTS, 

STAFF   DIRECT  MATTERS 

AND  PRINTED  FORMS. 

SYSTEM  AND  BUSINESS 

PERTAINING  TO: 

NO  NEW  PROCEDURE  OR 

METHODS  AND  FORMS, 

BUILDINGS 

FORM   EFFECTIVE   UNLESS 

AND  ALL  PHASES  OF  COST 

EQUIPMENT   INCLUDING 

AUTHORIZED  BY 

ACCOUNTS  IN  CHARGE. 

MACHINES,   TOOLS  AND 

HEAD  OF  THIS  DIVISION. 

STANDARDS 

PROCESSES 

ROUTING 

SCHEDULING 

MOTION  AND  TIME 

STUDIES. 

FIG.  3. — Chart  illustrating  staff  features  in  a  large  industrial  organization. 
The  staff  functions  are  limited  to  research,  and  recommendations.  The 
routine  is  carried  on  by  the  line  departments  shown  in  Fig.  2. 

primarily  a  research  and  advisory  division,  the  result  of  whose 
investigations  and  whose  recommendations  are  brought  up  at 
such  meetings  of  department  heads  and  others  as  may  have  been 
predetermined.  It  is  the  duty  of  the  Statistical  Division  to  see 
that  records  by  various  departments  are  not  merely  kept  and 
stored  away,  but  that  from  each  set  of  records  is  secured  a  method 
of  most  effective  analysis,  so  that  the  records  of  the  past  may  be 
compared  with  the  records  of  the  present  and  conclusions  may  be 
drawn  as  to  future  action. 


32         FACTORY  ORGANIZATION  AND  ADMINISTRATION 

The  individuals  engaged  in  this  division  must  be  experts  in 
theory  of  accounts,  the  science  of  statistics,  the  art  of  graphical 
presentation  and  cost  accounting.  The  tendencies  and  facts' 
indicated  by  an  analysis  of  the  records  must  be  brought  forcibly 
to  the  attention  of  all  individuals  whose  actions,  based  on  experi- 
ence and  intuition,  differ  from  the  action  indicated  by  an  analysis 
of  figures,  records  and  statistics.  It  should  be  the  aim  of  an 
organization  to  make  history  first  and  then  to  record  it.  The 
records  of  matters  that  are  done  and  over  with  should  be  adequate 
but  brief.  Useless  statements  and  reports  should  be  eliminated. 
Detailed  cost-keeping  can  be  and  usually  is  over-done. 

What  constitutes  a  delightful  problem  for"  an  accountant 
may  be  of  no  use  as  an  aid  to  executive  control.  It  is  not  so 
important  .to  know  exactly  how  bao!  a  mistake  has  been  as  it  is 
to  know  that  mistakes  are"  being  made  in  tinle  to  stop  them. 
An  important-lunction  of  the  bureau  of  statistics  is  to  see  that 
approximately  accurate  daily  records  are  prepared  which  indi- 
cate quickly  what  the  general  trend  of  events  is  in  each  depart- 
ment of  the  plant.  Direct  contact  with  current  work  is  brought 
about  by  the  committee  system,  introduceo!"  by  C.  U.  Carpenter, 
by  which  department  heads  responsible  for  the  prosecution  of 
routine  work  frequently  meet  the  members  of  the  staff  divisions. 

39.  Division  of  Materials. — This  division  is  advisory  as  to' the 
fitness  of  materials,  as  indicated  by  the  technolo^  ofthe  various 
materials  employed,  with  constant  attention  to  cost  reduction 
as  well  as  the  bettering  "of  product.     Its  head  should  be  an 
engineer  thoroughly  conversant  with  the  testing  of  materials. 

40.  Plant,  Equipment  and  Processes  Division. — This  division 
will  consider  and  decide  upon  methods  of  routing,  scheduling, 
motion  and  time  studies,  preparation  of  instruction  sheets  and 
cards,  standardization  of  equipment.     In  all  of  these  matters 
the  work  of  the  staff  division  ends  with  the  successful  carrying 
out  of  a   nethod  recommended  by  it.     The  routine  is  carried 
on  by  men  adapted  to   carry  out  routine  work  successfully. 
For  instance,  many  of  the  decisions  of  this  staff  division  are 
applied  to  the  routine  work  of  the  planning  or  production  de- 
partment, which  is  not  a  staff  division. 

41.  Routing. — This  involves   a  study  of  the  processes   and 
product  and  the  preparation  of  process  maps  for  the  various 
classes  of  product  and  the  determination  of  most  predominant 
paths,  some  of  them  consecutive,  some  of  them  simultaneous, 


ORGANIZATION  AND  CONTROL  33 

together  with  the  floor  spaces,  weights,  bulks,  etc.,  involved, 
and  recommendations  as  to  rearrangements  of  equipment  and 
departments,  and  proposals  as  to  building  modifications  and 
extensions.  It  consists  further  in  the  designation  of  which 
department,  machine  and  class  of  individuals  are  to  perform  the 
operations  indicated. 

42.  Scheduling. — This  consists  of  the  determination  of  the 
sequence  in  which  all  orders  which  are  to  be  worked  on  by  the 
various  departments  of  the  establishment  are  to  be  listed  so  as 
to  determine  their  precedence  and  the  methods  of  preparing  a 
definite  program,  in  order  that  the  shop  may  be  provided  by 
the  production  or  planning  department  with  a  daily  schedule 
covering  the  sequence  of  all   work  for  the  day.     Scheduling 
naturally  divides  itself  into  two  sections,  one  having  to  do  with 
the  scheduling  and  tracing  of  an  order  from  the  time  of  its  first 
receipt  or  issuance  as  part  of  a  manufacturing  program  to  the 
time  it  is  translated  into  many  production  orders  by  the  produc- 
tion on  planning  department,  the  other  having  to  do  with  the 
scheduling  and  tracing  of  the  individual  production  orders. 

43.  Motion  and  Time  Studies. — Motion  study  consists  of  the 
analysis  of  each  process  into  its  ultimate  simplest  steps,  and  the 
elimination  of  useless  or  improper  motions.     This  process  is 
prerequisite  to,  and  more  difficult  than,  time  study,  which  consists 
of  the  timing  with  a  stop-watch  of  the  elements  indicated  by 
the  motion  study.     That  motion  study  is  more  difficult  than 
time  study  is  proved  by  the  revelations  disclosed  by  Frank 
Gilbreth's  application  of  ttfe  motion-picture  camera  to  assem- 
bling operations.     Motion  study  research  can  be  applied  to  ac- 
counting, designing  and  drafting  methods  and  equipment,  as 
well  as  to  mechanical  and  trade  processes. 

44.  Preparing  Instructions. — The  results  of  the  researches  in 
routing,  motion  studies  and  time  studies  are  to  be  taken  up  with 
the  most  skilled  men  in  each  process,  these  being  the  men 
usually  detailed-a«-  demonstrators  while  the  motion-  and  time- 
study  observations  are  being  made,  due  allowance  being  made 
if   the   demonstrator   is   a   so-called   pacemaker,    and   detailed 
instructions  are  to  be  prepared  which  are  to  be  the  standard 
practice  and  are  not  to  be  departed  from.     Proposals  for  different 
steps  or  methods  from  the  standard  are,  however,  to  be  en- 
couraged through  the   medium   of  a  suggestion  system,   and 
duly  rewarded  if  they  result  in  improvement. 


34         FACTORY  ORGANIZATION  AND  ADMINISTRATION 

The  instruction  sheets  are  to  be  furnished  to  the  production 
or  planning  department  for  all  new  operations  in  just  the  same 
manner  that  the  designing  department  furnishes  the  detailed 
shop  working  drawings  for  the  designed  product.  In  this 
particular  respect  it  may  be  said  that  the  staff  division  does, 
after  all,  come  in  touch  with  the  routine  work  of  the  shop. 
However,  having  once  decided  on  the  instructions,  the  staff 
division  is  through  with  them  as  soon  as  they  are  working 
satisfactorily. 

In  the  use  of  instruction  cards,  only  absolutely  necessary 
information  should  be  issued,  and  this  in  the  briefest  possible 
form.  There  is  a  tendency  among  systematizers  to  require 
voluminous  instructions  to  be  issued  to  workingmen  who  have 
neither  the  time  nor  ability  to  read  and  absorb  them  rapidly, 
even  if  they  have  the  inclination  to  do  so.  However,  where  the 
instructions  are  an  attempt  to  present  to  the  working  man  the 
time  and  motion  analysis  necessary  to  be  followed  by  him  in 
order  to  get  his  work  out  in  the  required  time  and  earn  his  bonus, 
there  is  a  good  reason  for  statements  such  as  "Read  instructions 
—3  min.,"  "Pick  up  piece,  1/10  min."  etc. 

45.  Standardization  of  Equipment. — This  covers  standardiza- 
tion of  tools,  appliances  and  fixtures  by  an  expert  in  tooling 
processes,  who  may  wish  to  co-operate  with  the  motion-  and  time- 
study  man  or  men  in  securing  data. 

46.  System  Division. — This  division  of  the  Industrial  Engi- 
neering Department  has  to  do  with  system  design  and  installa- 
tion.    The  planning  of  our  procedures  and  approval  of  printed 
forms  are  duties  of  this  division.     No  new  procedure  or  printed 
form  is  effective  unless  inspected  by  or  authorized  by  the  head 
of  this  division. 

47.  Progress  of  an  Order. — The  table  in  Fig.  4  shows  how  an 
order  passes  through  the  various  departments  under  the  super- 
vision of  the  line  departments.     The  numbers  in  front  of  each 
division  indicate  the  sequence  of  steps  in  the  progress  of  the 
order.     The  superintendent  of  planning 'and  recording  has  con- 
trol over  the  manufacturing  program  and  through  his  scheduling 
department  controls  the  daily  order  of  work.     The  methods  of 
scheduling  are  determined  by  the  staff  organization.     The  rou- 
tine of  the  scheduling  of  the  regular  work  is  carried  on  by  the  line 
organization. 

There  may  be  few  industries  large  enough  to  require  fully 
manned  departments  for  all  of  the  activities  indicated.  No 
matter  how  small  the  industry  is,  however,  it  must  be  analyzed 


ORGANIZATION  AND  CONTROL 


35 


minutely  and  the  above  principles  of  the  science  of  management 
applied  in  its  organization  and  operation.     A  department  need 

PROGRESS  OF  AN  ORDER 


Departments 

in  charge  of 

Chief  Engineer 


Departments  in  charge  of  Supt. 
of  Planning  and  Recording 


Departments  in 

charge  of  Supt.  of 

Foremen,  Mechanics 

and  Laborers 


Order  Dept. 

1.  Order  entered. 

2.  Order  scheduled  and  followed 
to   tracer  in    production  dept. 
This  following  up  by  schedule 

clerk  includes  processes  3  to  9 
inclusive. 


Designing  Dept. 

3.  New   designs 
made. 
Drafting  Dept. 

4.  Drawing  list 
made. 


Production  Dept. 

6.  Stores   records    checked    and 
requisitions  made  on  purchasing 
dept. 

Purchasing  Dept. 

7.  Purchases  entered. 


5.  New   drawings    8.  Receiving  dept.  notified. 


made. 


Production  Dept. 
9.  Detailed  shop  order  prepared 

including: 
9a.  Routing. 
9b.  Instruction  cards. 
9c.  Tool  lists. 
9d.  Time  standards. 
9e.  Order  of  work. 
9f.   Tracing    of    work     through 

shops. 


11.  Inspection 

Dept. 

Inspection  and 
tests. 


10.  Work    in    shop 
department. 


12.  Time  and  costs. 

13.  Shipping. 


FIG.  4. — Progress  of  an  order  through  the  line  departments  of  an  industrial 
establishment.  Note  that  routine  work  is  not  handled  by  the  staff  bureaus, 
whose  fields  are  research,  conference,  and  recommendations. 

not  consist  of  many  men.     It  may  consist  of  but  one  man,  or 
one  man  may  conduct  several   departments,   but  his  specific 


36       FACTORY  ORGANIZATION  AND  ADMINISTRATION 


duties,  routine  and  responsibilities  must  be  accurately  deter- 
mined and  carried  out,  otherwise  the  industry  is  being  carried 
on  in  a  slip-shod,  inefficient  manner.  In  other  words  it  is  unor- 
ganized and  the  basic  principles  of  the  science  of  management  are 
not  being  applied. 

48.  Applying  above  Principles  to  Smaller  Industries. — The 
above  outline  is  intended  to  be  sufficiently  comprehensive  to 
apply  to  an  industrial  organization  of  considerable  magnitude. 
Extensive  as  it  may  seem  it  is  not  nearly  as  elaborate  as  the 
complete  organization  chart  of  a  large  railway  system. 

In  making  a  study  of  the  existing  organization  of  the  plan- 
ning and  recording  departments,  the  first  step  is  to  write  out  a 


Clerk 
Mr.  I. 
Drawing 
'and  Pattern 
Records  and 
Patt'rn  Storage. 
Mr.H.  and     /  TOOL  DESIGN 
DEPARTMENT 
Mr.  A.  AND 
ASSISTANT 


Purchases  of 
Machinery 
Mr.  B.    /Design 


of  Special 
Machines 
Mr.C.  and 
4  draftsmen 


Tracers 

Mr.G.  and 

C  men 

'Research 
Study  of 
Tool  Steels 
Mr.F.  and 
.Assistant 


Mr.  B. 


Jigs. 

Mr.D.  and 
4  draftsmen 

Punches 
and  Dies 
Mr.E.  and 
3  draftsmen, 


FIG.  5. — Departmental  internal  organization  circle. 

functional  list,  without  names  of  individuals,  showing  the  duties 
of  each  department  and  of  each  man  in  each  department.  With 
this  functional  analysis  as  a  basis,  there  can  be  built  up  such  as 
impersonal  functional  list  or  chart  as  appears  best  adapted  to 
the  company's  conditions.  The  complete  removal  of  the  personal 
element  is  absolutely  essential.  After  the  new  chart  has  been 
prepared,  comes  the  selection  of  each  man,  of  that  man  above  all 
others  that  will  best  fit  each  place. 

After  the  listing  of  each  distinct  departmental  function,  out- 
side of  the  direct  productive  departments  as  above,  or  including 
the  directr^rQductive  departments  also,  the  next  process  is  the 
merging  together  of  such  departments  as  must  necessarily  be 
combined  in  establishments  of  moderate  size,  which  cannot  carry 
a  list  as  long  as  the  above,  of  distinct  departments.  The  dis- 
tinct listing  of  functions  is  advisable,  however,  whether  each 


ORGANIZATION  AND  CONTROL 


37 


function  represents  a  department  or  not.     The  next  steps  in 
this  direction  would  be  the  charting,  first  of  the  organization  as 


(      Cost      \   I  \    f  Finished} 

Inventory 
I    Accounts   I    \  /    \  / 


\-   I  \     /    f"w 

DZ£f}    I**™**}    ratan 
MP^     /    \*  }     \VentiU 


FIG.  6. — General  organization  chart. 

it  now  exists,  and  secondly,  of  any  improved  or  ideal  organiza- 
tion which  it  is  hoped  to  secure. 


38       FACTORY  ORGANIZATION  AND  ADMINISTRATION 

49.  Types  of  Organization  Charts. — There  is  probably  no 
better  method  of  charting  than  that  of  circles  connected  by 
lines  or  arrows,  each  circle  representing  a  department,  and  the 
lines  or  arrows  representing  either  their  subordination  to  each 
other,  or,  by  some  different  type  of  line  or  by  using  a  separate 
chart,  representing  also  their  geographic  juxtaposition,  or  the 
manner  in  which  the  work  is  handled  first  by  one  department 
and  then  by  another.  This  method  of  charting  was  first  used  by 
Messrs.  Garcke  &  Fells,  and  adopted  by  J.  Slater  Lewis  and 
subsequent  investigators  into  the  matter  of  factory  organization. 
Fig.  5  is  an  example  of  this  method  of  charting  applied  to  internal 
departmental  organization.  This  example  will  suffice  to  show 
the  method  of  division  of  duties  coming  under  each  functional 
head.  I  believe  it  to  be  a  good  plan  for  each  department  to  have 
a  chart  showing  the  organization  within  that  department,  as 
well  as  a  chart  of  the  general  factory  organization,  so  that  each 
man  may  see  his  place  and  not  labor  under  any  delusions  as  to 
his  authority  or  his  prospects.  In  Fig.  6  is  presented  a  form 
illustrating  this  method  of  showing  the  general  organization 
scheme.  The  scheme  here  shown  is  presented  merely  as  an 
example  for  illustration. 

REFERENCES 

ENNIS:  "  Works  Management,"  Chapter  VIII. 

PARKHURST:  "Applied  Methods  of  Scientific  Management,"  Chapter  I. 

GOING:  "  Principles  of  Industrial  Engineering,"  Chapter  III. 

TAYLOR:  "Shop  Management,"  Paragraphs  233-240. 

EMERSON:  "Efficiency"  Chapter  IV. 

KNOEPPEL:  ''Installing  Efficiency  Methods,"  Chapters  VIII,  IX. 


CHAPTER  IV 
TYPICAL  FACTORY  ORGANIZATIONS 

50.  Existing  Organizations  Widely  Different. — Factory  organi- 
zations as  they  exist  to-day  present  as  wide  a  range  of  physio- 
logical structure  as  the  whole  animal  kingdom.    We  can  well  com- 
pare some  establishments  to  a  mass  of  protozoa.     Others  may 
be  likened  with  justice  to  tlie  highest  "orders  of  "vertebrates,  with 
their  complex  systems  of  organs,  muscles,  and  nerves.     In  the 
lower  and  extinct  types  of  animal  life"  we  find  beings  with  few 
organs/ and  often  with  the  same  organ  many  timBS  duplicated. 
As  the  ages  have  passed,  these  types  have  decreased  in  number, 
being  unable  to  resist  the  more  highly  developed  classes.     In  the 
higher  types   we   have   no   duplication   of  vital   organs.    The 
same  is  true  of  factories.     The  crude  types,  lacking  in  some 
organs,  and  with  much  duplication  of  functions,  must  pass  away 
and  give  place  to  the  vertebrate  type,  with  its  higher  physiolog- 
ical development. 

It  is  evident  that  the  designing  of  organizations  for  the  newer, 
larger,  and  more  complex  establishments  becomes  of  constantly 
greater  importance. 

51.  Importance  of  Charting. — In  the  great  majority  of  manu- 
facturing  establishments   the   company   officers   are   far   more 
conversant  with  the  details  of  financing,  accounting,  and  selling 
than  they  are  with  those  of  manufacturing.    From  time  to  time 
questions   of    business   policy   arise   which    have   an   intimate 
connection  with  cost  of  production,  time  of  delivery,  stock  of  raw 
material,  stock  of  finished  f>arts,  condition  of  work  in  process 
of  manufacture,  and  similar  matters. 

At  such  times  many  officers  realize  that  whereas  in  the  settle- 
ment of  questions  of  financing,  accounting,  and  selling  they  had 
clear-cut  records  at  hand  to  guide  them  in  forming  policies,  on 
the  other  hand,  when  it  came  to  questions  involving  the* factory 
itself,  they  were  dependent  wholly  upon  opinions  of  superintend- 
ents or  foremen,  these  opinions  having  no  firmer  foundation 
than  intuition.  The  realization  of  their  helplessness  and  the 

39 


40       FACTORY  ORGANIZATION  AND  ADMINISTRATION 

absence  of  reliable  and  accurate  knowledge  of  manufacturing 
conditions  has  been  an  incentive  to  progressive  officers  of  manu- 
facturing establishments  to  devise  more  thorough  systems  of 
executive  control  of  the  factory.  More  and  more  it  has  been 
appreciated  that  some  graphic  method  of  showing  inter-depart- 
mental relations  is  necessary  if  responsibility  is  to  be  placed. 

52.  The  Works  Manager's  Position. — The  most  successful 
factory  organizations  are  those  in  which  all  departments  having 
to  do  with  production  in  any  manner  whatever  are  subordinate 
to  and  responsible  to  one  general  head,  the  works  manager,  who 
has  a  thoroughly  competent  assistant  ready  to  take  the  chief's 
place  at  any  time,  and  who  is  recognized  as  the  acting  works 
manager  in  the  absence  of  his  superior.  This  form  of  control  is  a 
typical  characteristic  of  the  most  successful  manufacturing 
organizations.  There  must  be  no  paths  whereby  company 
officers  or  any  other  departments  in  any  way  deal  with  depart- 
ments responsible  to  the  works  manager  except  through  the  works 
manager's  office. 

In  manufacturing,  next  in  importance  to  the  centralization  of 
executive  authority  is  clearly  defined  functional,  departmental 
and  divisional  lines,  with  a  responsible  head  and  assistant  head 
for  each  department.  The  business  which  has  its  factory  de- 
partments so  organized  that  each  department  head  is  responsible 
to  the  works  manager,  without  any  intervening  bosses,  will  be 
far  more  free  from  internal  dissensions  than  one  in  which  this  is 
not  the  case.  Yet  one  hears  of  company  officers  gleefully  telling 
how  they  are  " keeping  them  guessing,"  in  referring  to  their 
most  capable  men  and  the  question  of  where  they  stand  in  the 
organization.  There  are  corporations  who  deliberately  pursue 
this  course  as  a  fixed  business  policy,  giving  as  their  reason  that 
they  do  not  want  to  give  any  man  too  much  power.  Some 
corporations  also  follow  the  policy  of  purposely  providing  some 
overlapping  or  duplication  in  order  to  set  up  rivalry  ancT"com- 
petition.  They  allow  departments  and  executives  to  rise  or  fall 
as  these  departments  and  executives  are  able  to  establish  con- 
fidence in  themselves  and  their  organizations.  While  there  are 
some  points  of  merit  in  such  procedure,  it  is  always  athwart  with 
danger  because  while  some  men  proceed  along  the  lines  of  es- 
tablishing efficiency  and  good  will,  others  will  proceed  with 
strictly  German  ruthlessness,  using  every  form  of  intrigue  to 
malign  or  belittle  the  work  of  their  rivals  or  of  anyone  who  they 


TYPICAL  FACTORY  ORGANIZATIONS 


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42         FACTORY  ORGANIZATION  AND  ADMINISTRATION 

think  stands  in  the  way  of  their  realizing  to  the  full  their  most 
selfish  ambitions.  Another  reason  for  failure  to  establish  clear- 
cut  departmental  lines  lies  in  company  officials  making  promises 
and  offers  to  high-grade  men  in  order  to  get  them  into  their 
employ — promises  they  know  they  cannot  fulfil  on  account  of 
numerous  similar  promises  to  other  employees.  Such  policies 
are  suicidal  to  a  business  in  the  long  run. 

A  few  examples  of  successful  organizations  of  factories  are 
illustrated  in  the  accompanying  charts. 

53.  Organization  Chart  of  a  Typewriter  Factory. — Figure  7 
shows  the  factory  organization  of  the  Remington  Typewriter  Co., 
of  Ilion,  N.  Y.,  as  reported  a  number  of  years  ago.  The  prin- 
ciples illustrated  by  this  chart,  however,  still  hold  good.  The 
same  is  true  of  all  the  succeeding  charts.  This  company  is 
engaged  in  what  is  generally  called  "a  straight  manufacturing 
proposition."  That  is  to  say,  things  are  not  built  to  order,  but 
the  product  is  fixed  and  thoroughly  standardized.  Hence 
designing  and  drafting  do  not  appear  among  the  list  of  depart- 
ments under  the  control  of  the  works  manager.  It  will  be  noted 
that  there  are  nine  general  departments,  viz.:  (1)  General 
office  of  works;  (2)  Purchasing;  (3)  Finished  parts  and  production 
orders;  (4)  Shipping;  (5)  Inspection;  (6)  Labor;  (7)  Cashier 
(including  time  and  cost  keeping);  (8)  Works  engineering,  and 
(9)  Manufacturing.  The  head  of  each  of  these  departments  is 
directly  responsible  to  the  works  manager  and  assistant  works 
manager  and  no  one  else. 

It  is  noteworthy  that  this  company  has  put  under  the  works 
manager  such  departments  as  shipping,  purchasing,  time  and 
cost  keeping.  In  the  great  majority  of  American  shops,  where 
principles  of  good  organization  have  not  become  well  recognized, 
we  find  the  head  bookkeeper  or  some  company  officer  looking  after 
purchasing,  time  and  cost  keeping  and  shipping,  leaving  all  the 
rest  of  the  functions  departmentalized,  as  shown  on  this  Reming- 
ton chart.  The  shop  Superintendent  therefore,  in  addition  to 
being  the  head  of  the  manufacturing  department  with  all  its 
subdivisions,  must  also  look  after  stock  and  production  orders, 
employment,  inspection,  works  engineering,  power  plant,  and  so 
on.  Being  badly  over-worked  he  usually  has  an  assistant 
Superintendent  under  him  and  a  general  foreman  under  the 
Assistant  Superintendent,  shop  clerks  under  the  general  foreman, 
and  so  on,  each  being  looked  on  as  more  or  less  of  a  "boss"  in 
the  works,  but  without  clearly  defined  limits  of  authority. 


TYPICAL  FACTORY  ORGANIZATIONS  43 

The  type  of  man  usually  filling  the  position  of  shop  superin- 
tendent in  the  average  American  shop  is  often  not  capable  of 
filling  the  broader  position  of  works  manager.  Frequently 
company  officers,  though  capable  of  financing,  accounting  and 
selling  are  also  incapable  of  acting  as  works  managers.  Most 
shop  superintendents  when  relieved  of  the  many  duties  which  are 
shown  segregated  in  this  chart  make  excellent  heads  or  super- 
intendents of  "  manufacturing  departments." 

Another  interesting  feature  of  the  Remington  chart  is  the 
division  of  the  labor  department  into  two  branches,  one  having 
to  do  with  hiring,  employment  records,  and  general  labor,  and 
the  other  having  to  do  with  industrial  betterments.  This  per- 
mits of  combining  a  good  hiring  boss,  on  the  one  hand,  and  a 
trained  welfare  man  or  sociologist,  on  the  other,  who  can  pool 
their  abilities  to  the  best  end  for  practical  results. 

It  is  quite  likely  that  with  the  development  of  the  idea  of  the 
Personnel  Department  many  other  activities  are  now  included 
In  the  general  head  of  the  Personnel  Department. 

It  will  also  be  noticed  in  the  Remington  chart  that  all  pro- 
duction orders  emanate  from  the  finished  parts  and  production 
order  department.  No  factory  operation  of  any  sort  whatever, 
whether  for  stock,  upkeep  or  betterments  may  be  made  without 
the  proper  order  issued  by  this  department.  The  stock  of  parts 
required  for  manufacturing  purposes  is  entirely  separate  from 
stock  for  shipping  and  repair  purposes.  Also  the  stock  of  raw 
material  is  under  separate  jurisdiction,  being  under  the  pur- 
chasing department.  All  stocks,  in  each  of  the  above  classes, 
are  regulated  by  definitely  established  maximum  and  minimum 
quantities. 

54.  Chart  of  an  Automobile  Factory. — Fig.  8  illustrates  the 
factory  organization  of  the  National  Motor  Vehicle  Co.,  of 
Indianapolis,  Ind.,  as  it  existed  'some  years  ago  when  the  writer 
was  Superintendent.  It  will  be  noted  that  the  title  of  Superin- 
tendent in  this  shop  carried  with  it  many  of  the  duties  which 
at  the  present  time  would  be  assigned  to  the  works  manager. 
This  type  of  factory  is  one  in  which  designing  and  drafting 
comes  to  the  front  to  some  extent  although  not  quite  as  promi- 
nent as  in  a  works  building  special  machinery  to  order  or  build- 
ing a  line  of  varied  engineering  prbduct.  Here  the  product  is 
redesigned  or  modified  annually  and  there  is  more  or  less  rede- 
signing and  experimenting  throughout  the  season.  It  will  be  noted 


44       FACTORY  ORGANIZATION  AND  ADMINISTRATION 


TYPICAL  FACTORY  ORGANIZATIONS  45 

that  we  have  one  general  circle  entitled  company  officers.  The 
proprietorship  of  this  company  centered  itself  in  two  company 
officers  who  had  not  definitely  divided  responsibility  between 
themselves,  although,we  had  a  very  well-mapped-out  chart  from  the 
company  officers  downward  through  the  three-fold  control  exer- 
cised respectively  over  the  purchasing  agent,  superintendent  and 
the  chief  engineer  in  charge  of  the  designing  department. 
Various  department  heads  were  apt  to  receive  conflicting  in- 
structions from  the  two  proprietors  previous  to  charting  the 
organization.  The  posting  of  the  organization  chart  had 
the  effect  of  eliminating  most  of  these  conflicts.  Glancing 
at  the  chart,  we  will  note  that  the  purchasing  department  had 
charge  of  shipping  and  receiving,  this  work  being  divided  into 
three  groups:  (1)  Shipping,  (2)  Receiving,  (3)  Stock  of  raw 
material  and  purchase  parts.  The  superintendent  had  charge 
of  not  only  the  manufacturing  department  but  also  the  produc- 
tion and  cost  department,  as  well  as  the  works  engineering 
including  power,  light,  heat  and  plumbing.  The  production 
and  cost  department  had  three  divisions:  (1)  Production  orders 
and  cost,  (2)  time  keeping,  (3)  stock  of  finished  manufactured 
^arts.  The  manufacturing  departments  were  as  follows:  (1) 
wood-working,  (2)  tool  department,  (3)  forge  department,  (4) 
machine  department,  (5)  sub-assembly  groups,  (6)  erecting 
department,  (7)  plating  and  polishing,  (8)  painting,  (9)  trimming, 
(10)  testing  and  inspecting,  (11)  final  assembly  after  painting. 
Subdivisions  of  some  of  the  more  prominent  manufacturing 
departments  are  indicated  on  the  chart;  for  example,  the  tool 
department  has  three  subdivisions,  viz:  (1)  Tool  designing  and 
tool  making,  (2)  tool  and  blue-print  storage,  (3)  machinery 
repairs.  The  forge  department  has  three  subdivisions,  (1) 
General  blacksmithing,  (2)  tool  forging,  (3)  case  hardening  and 
annealing.  The  machine  department  is  also  subdivided  thus: 
(1)  Lathes,  (2)  screw  machines,  (3)  drill  presses,  (4)  millwright, 
shafts  and  belts  and  oiling,  (5)  vise  and  handy  men,  (6)  milling 
machines.  Of  course  there  were  some  other  machines  including 
planers,  shapers  and  boring  mills  in  the  department  called  the 
lathe  department.  The  circle  entitled  sub-assembly  group  has 
eight  subdivisions:  (1)  Men  working  on  frames,  (2)  men  work- 
ing on  rear  systems,  (3)  men  working  on  front  systems,  (4)  men 
working  on  assembling  clutch,  shaft  and  universal  joint  groups, 
(5)  vise  hands  working  at  laying  out  and  high  grades  of  vise 


46         FACTORY  ORGANIZATION  AND  ADMINISTRATION 


work,  (6)  wiring  and  dash,  (7)  transmission,  (8)  steering  head 
and  control  parts  attached  to  same.     The  erecting  department 


ri 


~l 

- 

ASSISTANT 
TREASURER 

—  I 

ESTIMAT- 

ING AND 
SHIPPING 

SHIPPING 
RECORDS    AND 

CORRESPONDENCE 



SHIPPER 

— 

ING 

STENOGRAPHER 

STENOG- 
RAPHERS 

PURCHASING 

STENOGRAPHER 

1  PURCHASED 

AND  CLERK 

EXECUTIVE     OFFICE 

PRESIDENT    AND 

MANAGER 


FACTORY 

8UPT. 

PRODUCT- 
ION AND 
TRACING 

"I 

DESIGN 
AND 
ORDER 

PATTERN 
SHOP 


MACHINE 
SHOP 


BOILER 

AND  SHEET 

METAL 


1 


FIG.  9. — Showing  the  organization  of  a  strictly  engineering  business  con- 
ducted by  the  Western  Gas  Construction  Company  of  Fort  Wayne,  Indiana. 
Here  the  designing  department  takes  the  initiative  on  all  orders,  since  prac- 
tically all  product  is  built  to  order.  The  chart  covers  the  entire  organization, 
including  accounting  and  selling.  The  advisory  board,  which  consists  of 
heads  of  all  departments,  meets  once  a  week  and  makes  and  receives 
recommendations  from  the  president  and  manager,  who  is  himself  an 
expert  mechanical  engineer.  In  plotting  this  chart  the  rectangular  method 
of  procedure  has  been  employed. 

is  shown  in  eight  subdivisions:  (1)    Engine,  transmission  and 
axles,   (2)   control  and    brakes,   (3)    steering  wheel,   (4)   wiring 


TYPICAL  FACTORY  ORGANIZATIONS  47 

and  batteries,  (5)  muffler,  radiator  and  brakes,  (6)  dash,  fittings 
and  steps,  (7)  piping  and  tanks,  (8)  mileage  test.  It  will  be 
noted  that  the  repair  work  and  demonstration  is  put  under  the 
jurisdiction  of  the  designing  department,  the  idea  being  that  in 
this  manner  the  chief  designer  will  keep  in  very  close  touch  with 
the  performance  and  wear  of  the  machines. 

55.  Chart    of    an    Engineering   Works. — Fig.    9    shows    the 
organization  of  a  strictly  engineering  business  as  laid  out  by 
the  writer  for  the  conditions  existing  at  the  Western  Gas  Con- 
struction Co.,  of  Fort  Wayne,  Ind.     Here  the  designing  depart- 
ment takes  the  initiative  on  all  orders  since  practically  all  pro- 
duction is  built  to  order.    The  company  is  engaged  in  contract- 
ing for  gas  works.     The  chart  covers  the  entire  organization 
including  accounting  .and  selling.     The  advisory  board,  which 
consists  of  the  heads  of  all  departments,  meets  once  a  week  and 
makes  and  receives  recommendations  from  the  President  and 
Manager,  who  is  himself  an  expert  mechanical  engineer.     In 
preparing  this  chart  a  rectangular  method  of  procedure  has  been 
employed.     It  will  be  noted  that  on  the  commercial  side  there 
are  three  controlling  heads,  each  head  directly  responsible  to 
the  executive  office.     These  are:  (1)  Head  of  sales  department, 
(2)    head   of   purchasing   department,    (3)    assistant   treasurer. 
The  sales  department  it  will  be  noted  controls  assembling  and 
shipping,  the  purchasing  department  controls  stores,  the  treasury 
department  has  control  of  accounts,  including  cost  accounting 
and  all  stenographic  and  clerical  and  filing  work.     On  the  manu- 
facturing side  there  are  four  general  heads:  (1)  A  factory  super- 
intendent, (2)  head  of  production  and  tracing  department,  (3) 
head  of  designing  department,  (4)  head  of  equipment  and  erect- 
ing department.     The  factory  department  has  charge  of  the  pro- 
ductive departments  of  the  factory,  including  the  pattern  shop, 
foundry,   machine    shop,   boiler    and    sheet   metal   shop.     The 
machine-shop  foreman  has  also  jurisdiction  over  the  blacksmith 
shop  and  tool  room.     The  production  department  has  jurisdic- 
tion over  the  shop  clerks.     The  design  and  order  department 
has  charge  of  all  the  drafting,  issuing  of  all  shop  orders  and  check- 
ing,  library,    filing   and  technical   data.     The   equipment   and 
erecting    department   has   charge    of    the  erection  equipment, 
and  of  the  erecting  men,  who  are  scattered  through  the  world, 
and  the  erectors'  tool  room. 

56.  Chart    of    an  Electrical    Machinery   Factory.— Fig.    10 


48         FACTORY  ORGANIZATION  AND  ADMINISTRATION       • 

shows  the  organization  of  a  large  electric  machinery  manufac- 
turing company.  It  will  be  noted  that  the  control  passes  from 
the  stockholders,  via  Board  of  Directors  and  the  chairman  of 


I 


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o 
| 

5 

T? 

O 

O 

2 


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the  Board  to  the  President,  and  from  him  through  four  controlling 
heads,  viz:  Comptroller,  first  Vice-President,  Second  Vice-Presi- 
dent  and  Third  Vice-President.  The  Comptroller's  jurisdiction 
covers  two  divisions:  (1)  That  of  auditor,  (2)  that  of  treasurer. 


TYPICAL  FACTORY  ORGANIZATIONS 


49 


In  the  auditing  department  we  have  works  accounting,  traveling 
and  claim  agent,  general  accounting  and  invoice  department. 
In  the  treasury  department  we  have  the  legal  work  on  collections, 
collecting  department  and  credit  department.  The  First  Vice- 
President  has  jurisdiction  over  the  works  management.  He 


X — x 


JTIG>  11.— Chart  prepared  by  C.  W.  Adams  of  the  Link  Belt  Mfg.  Co. 
and  published  in  Factory  Magazine,  illustrating  the  functions  of  the  planning 
department. 

exercises  control  over  three  distinct  groups:  (1)  Head  of  engineer 
ing  and  his  assistant,  (2)  purchasing  department,  (3)  manager  of 
works.     The  Second  Vice-President  exercises  his  control  over  two 
distinct  groups:   (1)  Sales,  (2)  Publicity,  including   (3)  shipper, 


50         FACTORY  ORGANIZATION  AND  ADMINISTRATION 

(4)  welfare  and  employment  department.  Each  division  super- 
intendent has  jurisdiction  over  the  general  foreman  and  the 
general  cost  clerk  of  his  division. 

The  Second  Vice-President  has  control  of  selling  and  adver- 
tising, he  exercises  his  control  over  two  general  heads:  (1) 
Sales  manager,  who  has  control  of  the  various  district  sales 
offices,  (2)  publication  department,  which  has  control  over  the 
printing,  publishing  and  advertising  departments.  The  Third 
Vice-President  has  jurisdiction  over  two  branches:  (1)  General 
legal  department,  (2)  patent  department. 

57.  Chart  Showing  the  Functions  of  the  Planning  Department. 
— Fig.  11  shows  how  the  planning  department  relieves  the  shop 
foremen  of  handling  many  details  which  they  are  expected  to 
look  after  in  the  unorganized  shop.  Before  an  order  goes  to  the 
shop  it  goes  first  to  the  drafting  room  who  see  that  all  drawings 
are  provided,  such  drawings  for  shop  purposes  being  usually 
simplified  to  include  only  such  references  and  dimensions  as  are 
necessary  in  the  shop.  The  drafting  department  furnishes  a 
complete  bill  of  materials.  The  bill  of  material  goes  to  the 
balance  of  stores  clerk  who  makes  any  purchase  requisitions  nec- 
essary and  also  indicates  what  parts  are  in  finished  stock.  The 
checked  copy  of  the  bill  of  material  goes  to  the  route  clerk  who 
indicates  the  process-map  through  the  factory.  From  him  it 
goes  to  the  instruction-card  man  who  indicates  the  detailed 
operations  entailed.  From  him  the  bill  of  material,  route  sheet, 
and  instruction  cards  go  to  the  rate-fixing  clerk  who  indicates 
the  standard  times.  Thence  the  order  and  all  accompanying 
papers  go  to  the  order  of  work  clerk  who  sees  how  it  is  to  fit  into 
the  manufacturing  program  and  the  schedule  of  work  to  be  done. 
Thence  it  goes  to  the  production  clerk  who  sees  that  the  various 
work  orders  are  properly  put  into  the  shop  in  proper  sequence 
and  properly  followed  up. 

58.  The  illustrations  given  in  this  chapter  outline  for  the  most 
part  typical  line  organizations.  The  principle  of  staff  features  as 
illustrated  in  figure  3,  chapter  3,  and  of  functional  control  as 
described  in  paragraph  34,  can  be  introduced  effectively  into 
any  of  these  organizations  without  danger  of  disruption.  In 
fact,  this  process  is  at  the  present  time  going  on  in  virtually  all 
progressive  industrial  organizations  in  America. 

REFERENCES 

ARNOLD:  "Factory  Manager,"  pps.  117,  236,  275,  323. 
EMERSON:  "Twelve  Principles  of  Efficiency,"  Chap.  II. 
KIMBALL:  "Principles  of  Industrial  Organization,"  Chap.  VII. 


J 


CHAPTER  V 
FACTORY  ACCOUNTS 

59.  Accounts  Required  by  Modern  Management  Different 
from  Old  Customs. — There  are  certain  accounting  methods  in 
connection  with   modern  management  which  vary  from  old- 
fashioned  accounting  methods,  yet  whose  introduction  is  abso- 
lutely necessary  before  the  industrial  manager  can  get  a  correct 
and  prompt  survey  of  cost  of  production. 

Inasmuch  as  these  methods  are  different  from  those  formerly 
in  general  use  by  bookkeepers  who  had  obtained  their  training 
in  business  colleges,  the  industrial  manager  is  apt  to  have 
difficulty  in  getting  them  installed  in  cases  where  he  does  not 
have  direct  supervision  over  the  bookkeeping  department. 

60.  Double -entry  Principles  to  be  Applied  to  Cost  Accounts. — 
Cost  records  are  always  most  satisfactory  and  intelligible  if 
they  are  constructed  on  the  basis  of  the  theory  of  double-entry 
bookkeeping.     To  meet  these  requirements  we  need  merely  to 
bear  in  mind  that  in  double  entry  we  debit  what  we  receive. 
When  we  receive  nothing  we  debit  the  person  with  whom  we 
are  transacting  business.     We  credit  what  we  give.     When  we 
give  nothing  we  credit  the  person  with  whom  we  are  transacting 
the  business.     Another  fundamental  principle  which  is  the  basis 
of  all  trial  balances  and  balance  sheets  is  that  total  debits  must 
equal  total  credits.     According   to    Hatfield  the  fundamental 
equation  of  double-entry  bookkeeping  may  be  stated  in  the 
form: 

Goods  account  (debit)   =  proprietorship  account  (credit). 

This  equation  may  be  expressed  in  somewhat  more  complete 
form  as  follows: 

Assets  (debit)  +  negative  proprietorship  accounts  (debit)  = 
capital  account  (credit)  +  profits  (credit)  +  debts  (credit). 

Resources  and  losses  are  always  a  debit;  liabilities  and  gains 
are  always  a  credit. 

61.  Controlling  Accounts. — Accounts  which  involve  a  prepay- 
ment or  anticipation  of  an  expense  or  a  series  of  expenses,  to  be 

51 


52       FACTORY  ORGANIZATION  AND  ADMINISTRATION 

adjusted  exactly  at  certain  definite  fiscal  or  financial  periods,  are 
designated  as  controlling  accounts.  Controlling  accounts  play 
an  important  part  in  connection  with  cost-keeping.  A  single 
expense  account  which  may  be  a  general  controlling  account 
may  receive  summarized  periodic  entries  from  a  considerable 
number  of  subdivided  detailed  expense  accounts  which  serve  to 
assist  the  cost-keeper  in  determining  as  far  as  possible  the  expense 
burden  factors,  of  every  product  and  every  service. 

62.  The  Three  Fundamental  Cost  Accounts. — The  old  custom 
provided  three  basic  cost  accounts,  which  with  some  modifica- 
tions still  constitute  the  basis  of  modern  cost-keeping.     These 
accounts  were  designated  as  "Material,"  "Labor,"  and  "Ex- 
pense." 

63.  Subdivision  of  These  Accounts  and  Monthly  Closing. — 
One  of  the  important  changes  is  that  instead  of   having  the 
accounting    department    carry    only    the    three    fundamental 
accounts  mentioned,  new  accounts  have  been  substituted  as  fol- 
.lows,  namely,  "Raw  Materials,"   "Material  Burden,"  "Direct 
Labor,"  "Labor  Burden,"  "Expense  Burden,"  "Work  in  Process," 
and  "Finished  Stock." 

64.  "Raw  Material  Account." — This  account  is  debited  as 
material  is  received,  with  the  amount  of  its  cost  as  per  invoices, 
and  is  credited  with  the  total  charges  to  "Work  in  Process" 
for  all  materials  drawn  for  work  in  process,  per  orders  on  store- 
room.    The  debit  balance  should  represent  the  cost  value  of 
raw  materials  on  hand  at  the  opening  of  each  period,  which 
should  be  monthly,  the  account  being  closed  monthly,  or  by 
four-week  periods.     "Material  Burden"  is  a  general  account 
which  is  debited  with  the  monthly  or  periodic  totals  of  all  costs 
of  carriage  on  materials  received,  including  freight,  express,  and 
drayage,  cost  of  buying,  including  purchasing  department  salaries 
and  expenses,  cost  of  storing  and  handling,  including  all  store- 
room  salaries   and   expenses,  as  well  as  the  monthly  total  of 
all  salaries  and  wages  paid  to  receiving  department  clerks,  and 
laborers'  time  spent  in  hauling  and  placing  materials  received 
into  the  store-rooms. 

"Material  Burden"  account  is  credited  with  the  burden 
amounts  charged  to  "Work  in  Process"  account.  These  charges 
are  usually  on  the  basis  of  percentage-on-raw-material-cost, 
based  on  the  ratio  of  the  "Material  Burden"  account  during 


FACTORY  ACCOUNTS  53 

the  past  period  or  several  periods  to  the  "Raw  Material "  account 
during  the  same  time. 

65.  "Work  in  Process"  Account. — This  account  is  charged 
with  all  materials  drawn  for  work  in  process  per  orders  on  store- 
room, which  have  been  credited  to  "Raw  Materials"  account, 
as  well  as  with  all  "Material  Burden"  items  which  have  been 
credited  to   "Material  Burden.'7     It  is  also  charged  with  all 
Direct  Labor  charged  to  production  orders  during  a  given  period 
as  well  as  the  Expense  Burden.     This  Expense  Burden  may  be 
determined  by  a  number  of  alternate  methods  as  described 
under  the  heading  of  "Methods  of  Allotting  Expense  Burden." 
If  the  Expense  Burden  includes  in  addition  to  Indirect  Labor, 
also  all  other  expense  factors,  there  will  be  no  further  charges 
to  Work  in  Process,  but  if  the  expense  burden  is  divided  into 
different   kinds   of  expense  factors,   such   as   "Indirect  Labor 
Burden,"  "Machine  Burden"  and  "General  Expense"  burden, 
these  will  also  have  to  be  charged  to  "Work  in  Process."     "Work 
in  Process"  is  credited  with  the  total  of  all  orders  as  soon  as 
finished,  or  in  other  words  just  as  soon  as  they  become  "Finished 
Stock." 

66.  "Finished    Stock"   Account. — This   account   is   charged 
with  the  total  of  all  work  in  process  just  as  soon  as  an  order  is 
transformed  from  work  in  process  into  a  finished  order.     "Work 
in  Process"  account  is  credited  with  the  same  amount.     "Fin- 
ished Stock"  is  credited  with  the  manufacturer's  cost  price  as 
established  for  the  various  articles  to  be  made,  whenever  any 
articles  are  shipped.     This  "Manufacturer's  Cost"  price  is  then 
made  the  basis  of  operations  of  the  selling  department.     "  Manu- 
facturer's Cost"  price  may  be  slightly  higher  than  the  sum  of 
"Raw  Material,"   "Material  Burden,"   "Direct  Labor,"   "In- 
direct   Labor,"    "Machine    Burden"    and    "General    Expense 
Burden,"  in  order  to  allow  for  slight  fluctuations  in  cost.     Any 
apparent  profits  accumulated  in  this  way  can  be  transferred  to 
reserves,  for  meeting  depreciation  of  plant  and  equipment,  once 
a  year.     Fig.  12  illustrates  graphically  the  theory  of  cost  ac- 
counts as  above  indicated  in  its  simplest  form. 

67.  Methods   of  Allotting  Expense   Burden. — Percentage   on 
Wages. — The  oldest  method  and  the  one  still  in  most  general 
use  is  the  percentage  on  wages  method  established  by  finding 
the  ratio  in  percentage,  which  the  sum  total  of  Indirect  Labor, 
"fixed  charges"  and  all  other  expense  accounts  in  a  given  period 


54       FACTORY  ORGANIZATION  AND  ADMINISTRATION 

bears  to  the  sum  total  of  Direct  Labor  in  the  same  period.  Its 
greatest  weakness  lies  in  the  fact  that  it  over-charges  high-priced 
labor  which  may  use  shop  and  equipment  and  share  running 
expenses  only  a  short  time,  and  under-charges  low-priced  labor 
which  may  use  shop  and  equipment  and  share  running  expenses 


FIG.  12. 

a  long  time,  in  creating  a  direct-labor  cost  of  the  same  dollars- 
and-cents  value. 

The  ' 'fixed  charges"  include  the  allottments  from  constant 
expenses  such  as  rent,  interest,  insurance,  taxes,  general  officers* 
salaries,  etc. 

68.  Hourly  Expense  or  Man-hour  Rate. — A  more  recent 
method,  and  the  one  which  is  in  use  by  all  machine-tool  builders 
using  the  uniform  cost-accounting  methods  recommended  by 
the  National  Machine  Tool  Builders'  Association,  is  the  hourly 
expense  rate  obtained  by  dividing  the  sum-total  of  all  indirect 


FACTORY  ACCOUNTS  55 

labor,  "fixed  charges"  and  expenses  during  a  given  period  by 
the  sum  total  of  direct-labor  hours  in  the  same  period. 

69.  Separate   Man-hour  Departmental  and   General  Rates 
and  Hourly  Machine  Rates. — A  third  method,  probably  in  the 
least  general  use,  but  destined  to  become  far  more  widely  used 
is  one  which  establishes  (a)  an  hourly  rate  for  each  department, 
local  to  that  department  (b)  a  general  hourly  shop  overhead 
rate  (c)  an  hourly  rate  for  each  machine  or  group  of  machines. 
Rates  a,  b  and  c  are  mutually  exclusive  and  the  sum  total  of  all 
expenses  allotted  from  these  three  channels  must  approximate  the 
total  of  all  indirect  labor,  "fixed  charges"  and  all  other  expenses  in 
the  same  period.     Inasmuch  as  the  charges  to  "  Work  in  Process  " 
and  corresponding  credits  to  the  various  expense  accounts  during 
a  given  period  are  the  results  of  calculations  based  on  averages 
of  preceding  periods,  the  exact  balancing  in  order  to  close  the 
expense  accounts  must  be  left  to  an  adjustment  entry  which  may 
result  in  either  a  debit  or  credit  to  the  expense  account  at  the 
opening  of  the  next  period.     If  a  considerable  item,  this  adjust- 
ment entry  may  demand  a  modification  of  the  rates  for  allott- 
ing expense  burden  during  the  next  new  period. 

The  establishment  of  local  departmental  burden  rates  affords 
the  proper  basis  for  comparing  local  expenses  from  month  to 
month,  as  well  as  holding  down  costs  on  product  which  passes 
through  departments  having  low  local  burdens. 

70.  Method  of  Establishing  the  Hourly  Machine  Rate.— A 
number  of  different  considerations  enter  into  the  establishment  of 
the  hourly  machine  rate.     Among  these  are  the  following:  (1) 
The  interest  and  depreciation  on  the  purchase  price  of  the 
machine ;  (2)  the  annual  cost  of  repairing  the  machine  and  keep- 
ing it  supplied  with  lubricants  and  cutting  tools,  etc.;  (3)  the 
floor  space  occupied  by  the  machine  and  the  stock  lying  about  it; 
(4)  the  power  consumed  by  the  machine. 

With  the  previous  year's  expense  accounts  as  a  basis,  an 
estimate  is  made  of  the  total  maintenance  of  all  machines. 
Out  of  this  grand  total  or  budget,  each  machine  tool  is  given  a 
certain  definite  allowance  or  allotment  for  the  coming  year. 
A  card  is  then  written  out  for  each  separate  machine  tool,  and 
after  determining  approximately  the  number  of  hours  that  the 
machine  will  run  during  the  year,  its  hourly  operating  rate  is 
established  for  the  next  year  by  dividing  the  total  budget  by  the 
estimated  hours  that  the  machine  is  to  be  used.  Every  time  that 


56       FACTORY  ORGANIZATION  AND  ADMINISTRATION 

the  machine  is  used,  it  is  credited  with  the  amount  it  earns  as 
its  hourly  rate,  the  amounts  being  posted  on  the  card  record  for 
that  machine  tool  from  the  cost  department's  records,  showing 
amount  or  semi-annual  period  it  is  found  likely  that  the  postings 
on  any  card  will  over-run  or  fall  short  of  the  amount  allotted  the 
given  machine  changes  must  be  made  in  the  individual  machine 
rate.  The  exact  balancing  at  the  close  of  a  year  will  be  left  to 
an  adjustment  entry  which  may  result  in  either  a  debit  or  credit 
to  the  machine  expense  account  at  the  opening  of  the  next 
period.  With  careful  allotment  of  rates  these  adjustment  entries 
will  be  relatively  small  and  required  only  in  order  to  make 
an  exact  balance  at  closing. 

71.  Segregation  of  Works  Expenses  from  Selling  Expenses.— 
It  will  be  noted  that  at  the  outset  it  was  recommended  to  keep 
out  of  General  Expense  account,  items  relating  to   "Material 
Burden,"    such    as    transportation,    hauling,   purchasing     and 
stores.     Similarly  all  expenses  of  the  finished  stock-room  and 
all  shipping  department  expenses  outside  of  outgoing  freight 
charges  can  be  kept  in  a  separate  account,  which  is  entered 
into  the  general  total  for  determining  the  Expense  Burden. 

All  distinctly  selling  expenses  should  be  kept  separate  and 
the  sales  department  made  to  show  a  profit  on  the  basis  of  the 
difference  between  Manufacturer's  Cost  and  Selling  Price. 
Administrative  expense  which  is  neither  a  direct  charge  to 
Works  Management  nor  Selling,  may  be  equally  divided  between 
Manufacturer's  Cost  and  Selling  Cost. 

72.  Detailed  Cost  Statistics  and  Records. — Very  little  has  been 
said  in  this  discussion  as  to  the  forms  for  posting  these  records. 
The  nature  of  the  business  will  determine  whether  these  records 
are  to  be  based  on  unit  prices  per  quantity  of  output,  per  variety 
of  output,  or  per  individual  lot  or  item,  whether  each  individual 
item  is  to  have  its  cost  figured  regularly  or  at  intervals.     Most 
books  on  cost-keeping  are  filled  with  examples  of  forms  for  record- 
ing the  statistical  data.     A  minimum  of  stress  is  laid  on  these 
features  in  this  discussion  in  order  to  bring  out  more  strongly 
the  importance  of  the  foregoing  general  principles. 

The  extent  to  which  detailed  costs  are  obtained  depends  very 
largely  on  the  nature  of  the  business.  In  some  industries  it  will 
be  satisfactory  to  obtain  costs  by  processes,  in  other  industries 
by  classes  or  groups  of  products,  in  others  by  weight  or  bulk 
and  in  still  others  by  departments  or  by  machines. 


FACTORY  ACCOUNTS  57 

73.  Proper  Classification  of  Expenditures. — The  first  thing 
for  an  accountant  to  determine  with  regard  to  an  expenditure 
is  whether  it  is  a  charge  to  assets  or  to  revenue.     We  must  deter- 
mine whether  the  expenditure  was  (a)  for  materials,  supplies  or 
labor  for  regular  production  (b)  for  materials,  supplies  or  labor 
for  special  production  which  is  to  be  charged  to  customers  (c) 
for  distinct  additions  to  plant  or  equipment  (d)  for  maintenance 
of  existing  plant  or  equipment,  or  (e)  for  replacement  of  worn-out 
plant  or  equipment. 

If  the  system  of  accounts  heretofore  indicated  is  in  use,  which 
shows  the  value  of  raw  materials,  work  in  process,  and  finished 
stock  each  month,  then  there  is  apparently  no  need  for  the  carry- 
ing over  of  heavy  purchases  under  (a)  and  (b)  to  be  diffused  over 
several  months,  as  the  month's  operating  profits  and  losses  are 
easily  determinable  and  quite  independent  of  whether  heavy 
purchases  have  been  made  in  any  one  month  or  whether  the  pur- 
chases have  been  unusually  light.  In  the  matter  of  items  under 
class  (4),  namely  the  replacement  of  wornout  plant  or  equipment, 
such  items  would  be  paid  for  out  of  depreciation  fund  if  such 
exists.  If  such  does  not  exist  and  the  expenditure  is  of  consid- 
erable magnitude,  the  expenditure  should  be  diffused  over  such 
period  as  may  be  determined  on  as  fair  to  ordinary  production. 

It  is  frequently  the  case  that  good  discrimination  is  exercised 
in  properly  distributing  expenditures  for  which  there  is  a  sup- 
plier's invoice  whereas  no  such  discrimination  is  used  in  dis- 
tributing expenditures  of  the  materials  and  labor  of  the  industry, 
so  that  the  apparent  cost  of  production  varies  widely,  whereas 
if  expenditures  were  properly  allotted  there  would  be  no  such 
apparent  discrepancies. 

74.  Detailed  Cost  Posting  Methods. — The  methods,  records 
and  forms  required  for  finding  and  posting  costs  are  discussed 
fully  in  a  later  chapter  on  The  Cost  Department. 

REFERENCES 

GOING:  "Principles  of  Industrial  Engineering,"  Chapters  V  and  VI. 

HUMPHREYS:  "Lecture  Notes  on  Business  Engineering,"  pages  498-510. 

DAY:  "Accounting  Practice/'  Part  II. 

KNOEPPEL:  "Maximum  Production."  Chapters  III  and  IV. 

CHURCH:  "Expense  Burden." 

BRISCO:  "Economics  of  Business,"  Chapter  VI. 

WEBNER:  "Factory  Costs,  Parts  IV  and  V. 

EVANS:  "Cost  Keeping  and  Scientific  Management,"  Chapters  I  to  IV. 

REDFIELD:  "The  New  Industrial  Day,"  Chapters  IV  and  V. 


CHAPTER  VI 
DEPARTMENTAL  REPORTS 

75.  Purpose  of  Departmental  Reports. — Departmental  reports 
serve  two  purposes — they  enable  the  head  of  each  department 
to  know  conditions  in  his  own  department,  and  they  enable  the 
management  to  get  in  concise  form  definite  knowledge  as  to  each 
department. 

The  first  requisite  of  a  departmental  report  is  that  it  serves 
some  really  useful  purpose.  This  fact  is  often  lost  sight  of.  In 
some  establishments,  reports  are  made  covering  data  which  have 
very  little  if  any  practical  value.  This  is  a  danger  which  must 
be  carefully  avoided.  Whenever  a  works  manager  finds  reports 
accumulating  on'  his  desk  which  he  finds  he  passes  by  week  after 
week,  without  drawing  any  useful  information  from  them,  he 
would  better  discontinue  such  reports  altogether. 

On  the  other  hand,  there  is  no  better  way  of  keeping  in  inti- 
mate touch  with  the  whole  field  of  a  large  establishment  than 
through  the  medium  of  well-planned  periodic  reports.  Just  what 
should  such  reports  cover?  The  purpose  of  this  chapter  is  to 
determine  methods  of  furnishing  classified  periodic  information 
to  the  executive  office  covering  existing  conditions  and  out- 
look of  every  phase  of  the  manufacturing  side  of  a  business. 

Certain  reports  need  to  be  made  in  order  that  the  executive 
department  may  at  any  time  know  the  exact  conditions  prevail- 
ing in  every  department.  Such  reports,  although  comprehensive, 
should  be  condensed.  Hence,  the  method  of  preparation  may, 
in  certain  departments,  require  that  department  to  keep  detailed 
records  which  can  be  referred  to  if  necessary  in  explaining  the 
summarized  information  in  the  reports. 

76.  Bureau  of  Statistics  or  Records. — The  duty  of  determining 
the  nature  of  the  departmental  reports,  as  well  as  how  these 
reports  are  to  be  condensed  or  transformed  into  graphical  or 
statistical  form,  is  best  placed  under  the  jurisdiction  of  a  staff 
bureau  of  statistics,  or  in  the  case  of  a  smaller  concern,  a  single 
statistician.     This  bureau  or  single  official  should  be  subordinate 

58 


DEPARTMENTAL  REPORTS  59 

to  no  one  excepting  the  works  manager  and  should  confer  with 
the  various  departments  furnishing  reports,  explaining  fully  the 
objects  sought  to  be  accomplished. 

It  is  recommended  that  any  reports  prepared  by  certain  depart- 
ments be  returned  regularly  to  the  department  from  which  the 
reports  originate.  It  is  desirable  that  all  reports  be  provided 
with  spaces  where  they  can  be  checked  in  the  statistician's  office, 
indicating  that  the  report  has  been  noted,  or  that  they  be 
stamped  in  the  office  of  statistics  after  having  been  noted  and 
approved,  and  that  there  be  a  private  secretary  in  the  statistician's 
office  who  has  a  list  of  reports  that  should  come  in,  with  the  dates 
on  which  these  reports  fall  due.  The  private  secretary  should 
see  that  these  reports  are  presented  to  the  statistician's  office 
when  due,  and  that  they  are  returned  from  there  to  the  depart- 
ment concerned  after  having  been  noted,  such  statistical  posting 
from  them  having  been  done  in  the  statistician's  office  as  may  be 
deemed  desirable. 

77.  Typical  Factory  Reports. — Let  us  take  first  the  general 
factory  office.  The  general  office  of  the  factory  receives  the  orders 
from  the  sales  department,  turns  them  over  to  the  proper  order 
departments,  and  advises  the  sales  department  of  promise  dates 
of  delivery.  This  would  be  the  routine  in  a  factory  which  does 
not  .regularly  ship  everything  from  stock.  The  nature  of  the 
reports  from  the  general  office  department  to  the  statistician  will 
vary  with  the  class  of  manufacturing  done.  For  instance,  the 
reports  of  this  department  in  a  hosiery  mill,  employing  1200  people 
in  the  manufacture  of  a  few  dozen  varieties  of  hose,  will  be  quite 
different  from  the  reports  in  a  factory  employing  three  hundred 
men  in  the  manufacture  of  a  dozen  types  of  machinery,  in- 
volving some  ten  thousand  different  component  parts,  to  cover 
the  whole  line. 

In  general  the  things  the  works  manager  wants  to  know 
periodically  are:  First,  the  condition  of  orders;  second,  the  con- 
dition of  stock;  third,  the  cost  of  product  and  of  running  of  plant. 

It  is  not  the  purpose  of  this  chapter  to  discuss  financial  reports 
such  as  should  be  received  by  the  general  office  management 
from  the  accounting  department.  The  particular  class  of  re- 
ports here  referred  to  are  such  as  are  to  be  rendered  to  the  works 
manager  of  a  factory. 

Certain  reports  should  be  made  every  week,  and  turned  into 
the  works  manager's  office  on  Monday  of  each  week,  such  reports 


60       FACTORY  ORGANIZATION  AND  ADMINISTRATION 


covering  the  week  ending  the  previous  Saturday.  These  weekly 
reports  are  then  discussed  at  a  meeting  of  an  advisory  board  or 
council  consisting  of  heads  of  all  responsible  departments. 

Weekly  reports  of  this  character  can  be  presented  to  the 
manager  either  in  the  form  of  a  statement  on  a  regular  printed 
blank,  or  in  the  shape  of  a  typewritten  statement  from  the  head 
of  the  department.  A  printed  sheet  for  this  purpose  is  shown 
in  Fig.  13.  This  may  be  used  for  a  general  office  department 
report  of  machine  orders  entered,  a  shipping  department  report 


COST  DEPT'S  REPORT  OF  EMPLOYEES  AVERAGE  WAGE  RATES 
AND  PRODUCTIVE  AND  NON-PRODUCTIVE  LABOR. 


NO  EM- 
PLOYEES 


AVERAGE 
WAGE 


PAY-ROLL 
FOR   DEPT 


HOURS 
FOR  DEPT. 


HRS. 
FOR  DEPT. 


PRODUCTIVE 

HRS. 
FOR  DEPT. 


DUCTIVE  HRS 
FOR  DEPT. 


GENERAL  OFFICE  DEPT'S  REPORT  OF  MACHINERY  ORDERS  ENTERED. 

WEEK  ENDING: 


ORDER 
NO. 


NAME  OF  CONSIGNEE 


NO. 
MACH. 


WEIGHT 


DATE 
TYPE      VOLTAGE      GAUGE        TO  BE 

SHIPPED 


GENERAL  MONTHLY   SUMMARY. 


TOTAL  NO.MACHINES  SHIPPED  TO  DATE  THIS  YEAR 


NO   MACHINES   ON    HAND  READY  FOR  SHIPMENT  THIS  DATE  THIS  YEAR 


'  ORDERS  STILL  TO    BE   SHIPPED   AT  THIS  DATE  THIS  YEAR 


TOTAL  PAY  ROLL  TO  DATE  THIS   YEAR 


SHOP  EXPENSE 


MATERIAL  ACCOUNT  TO  DATE  THIS  YEAR 


Fig.  13 (middle),  Order  Report;  Fig.  14  (top),  Cost  Report;  Fig.  15  (bottom), 
Monthly  Summary. 

of  machines  shipped,  and  a  manufacturing  department  report 
of  machines  ready  for  shipment. 

The  general  office  department  report  is  turned  into  the  statis- 
tician's office  by  the  head  of  the  general  office  or  correspond- 
ence department,  and  on  it  are  listed  the  most  important  items 
for  which  orders  have  been  received  during  the  preceding  week. 


DEPARTMENTAL  REPORTS  61 

The  form  shown  would  apply  to  a  business  in  which  electrical 
mining  machines  are  manufactured.  A  little  ingenuity  will  adapt 
the  principle  involved  to  any  other  class  of  manufacturing. 

78.  Drafting   Department   Reports.— The    second    report   in 
which  the  manager  is  interested  is  that  of  the  drafting  depart- 
ment, covering  bills  of  material  sent  to  the  production  depart- 
ment.    For  this  report  no  printed  form  is  necessary.     It  can 
be  written  on  the  typewriter.     A  list  of  bills  of  material  actually 
sent  to  the  production  department  should  be  followed  on  the 
same  report  by  a  list  of  such  orders  as  have  been  received  during 
the  week  requiring  bills  of  material,  but  for  which  the  bills  of 
material  have  not  been  issued.     Drafting  department  organiza- 
tion counts  for  a  good  deal  in  this  matter,  and  the  routine  should 
be  so  fixed  that  all  bills  of  material  for  orders  received  by  the 
bill  of  material  division  of  the  drafting  department  from  the 
general  office  department  during  any  week  are  issued  during 
the  current  week,  including  orders  received  on  the  last  two  days 
of  the  week,  except  for  entirely  new  designs. 

A  comparison  of  the  drafting  department  report  of  bills  of 
material  sent  to  the  production  department,  with  the  general 
office  department's  report  of  machinery  orders  entered,  will 
indicate  what  orders  remain  in  the  drafting  department,  for 
which  that  department  has  not  yet  prepared  bills  of  material. 

79.  Production  or  Planning  Department  Reports. — The  pro- 
duction or  planning  department  in  its  turn  should  send  a  report 
of  bills  of  material  disposed  of,  and  sub-orders  sent  to  the  shop 
like  the  drafting  room's  report.     This  statement  requires  no 
printed  form  and  can  be  written  on  the  typewriter.     Routine, 
too,  must  here  be  fixed  so  that  all  bills  of  material  received  during 
the  week  are  disposed  of  that  week,  with  a  possible  exception  of 
bills  of  material  received  on  Saturday.     A  list  of  bills  of  material 
disposed  of  should  be  followed  on  the  same  report  by  a  list  of  the 
bills  of  material  left  over.     The  first  part  of  the  report  shows 
orders  which  have  been  sent  to  the  shop  for  actual  work  during 
the  previous  week.     By  comparing  this  report  with  the  two  pre- 
ceding reports  it  is  easily  understood  to  what  extent  the  produc- 
tion department  is  lagging  behind  the  orders  received. 

80.  Reports    of   Finished   Product. — The   manufacturing   or 
tracing  or  testing  department's  report  of  machines  ready  for 
shipment  forms  the  next  link  in  the  chain  of  reports.     This  report 
is  made  by  one  of  these  departments  from  its  records  or  obser- 


62       FACTORY  ORGANIZATION  AND  ADMINISTRATION 

vations,  and  covers  all  orders  of  any  magnitude  completed  during 
the  preceding  week  which  are  ready  for  shipment. 

81.  Shipping  Department  Reports. — On  a  printed  form,  similar 
to  that  used  for  the  preceding  reports,  a  report  of  the  shipping 
department  may  be  presented.     By   comparing  the   shipping 
department's  report  of  machines  shipped  with  the  manufacturing 
department's  report  of  machines  ready  for  shipment,  the  manager 
can  discover  about  how  much  time  elapses  between  the  shop's 
report  of  completion  of  an  order  and  shipping  it.     Such  a  com- 
parison will  also  indicate  what  part  of  the  product  goes  into  fin- 
ished stock  instead  of  being  shipped. 

82.  Cost  Department  Report. — Another  report,  that  of  the 
cost  department,  covers  the  labor  conditions  in  the  factory,  and 
is  one  of  the  most  important.     The  printed  form  for  this  report 
is  shown  in  Fig.  14.     This  report,  considered  by  men  who  have 
had  an  insight  into  manufacturing,  enables  them  to  feel  the  pulse 
of  the  manufacturing  department.     Considered  in  connection 
with  the  previous  reports,  it  forms  the  basis  for  telling  whether 
certain  departments  are  working  at  their  best  efficiency  or  not. 

83.  Weekly  and  Monthly  Reports. — All  the  reports  which 
have  been  mentioned  are  best  submitted  weekly  under  ordinary 
conditions.     In  addition  to  these  weekly  reports,  there  will  be 
in  any  business  certain  monthly  reports.     These  monthly  reports 
will  be  kept  on  hand  for  reference  until  the  next  monthly  report 
is  ready.     Such  a  monthly  report  can  be  well  presented  on  the 
same  printed  form  as  that  shown  in  Fig.   13.     The  machine 
orders  are  arranged  in  this  case  in  order  of  urgency.     Comparison 
of  this  monthly  statement  with  reports  for  previous  months  will 
show  to  what  extent  shipping  capacity  is  taken  up. 

For  summarizing  some  of  the  principal  reports  which  have 
been  submitted  by  the  different  departments,  a  general  monthly 
statement  is  prepared  by  the  private  secretary  in  a  works  man- 
ager's office.  The  items  given  in  this  report  indicate  the  number 
of  machines  shipped  during  the  year  up  to  the  day  of  the  report, 
and  comparison  of  this  number  with  the  same  items,  same  date, 
previous  year.  Fig.  15  shows  such  a  report. 

For  particular  purposes,  carefully  prepared  reports,  as  above 
indicated,  can  be  made  nearly  as  effective  as  the  results  obtained 
from  a  monthly  closing  of  the  books.  The  latter  process  is,  in 
many  businesses,  totally  out  of  the  question. 

84.  Discussion  of  Reports. — To  gain  any  real  advantage  from 


DEPARTMENTAL  REPORTS  63 

reports,  however,  they  must  be  given  attentive  consideration, 
and  thoroughly  discussed  by  a  council  consisting  of  the  heads  of 
all  departments  affected  by  the  reports.  A  great  many  manu- 
facturers realize  the  advantage  of  such  council  meetings,  but 
fail  in  lacking  the  initiative  of  getting  such  meetings  started  and 
keeping  them  up.  These  meetings  are  becoming  more  and  more 
a  feature  of  successful  manufacturing  establishments.  The  meet- 
ings are  best  held  at  such  times  when  they  do  not  interfere  with 
the  lunch  hour,  or  personal  time  of  employees.  A  morning 
period  from  10  A.  M.  to  not  later  than  12  has  been  found  the  most 
satisfactory. 

85.  Graphical  Reports. — To  many  managers  graphical  sum- 
maries of  reports  present  a  lifelike  picture  of  conditions  in  a  most 
comprehensive  manner,  and  suggest  remedial  steps,  where  mere 
tabulated  figures  would  not  have  been  such  a  stimulus.  This 
is  particularly  true  when  the  works  manager  is  an  engineer,  or 
has  had  scientific  training,  and  is  accustomed  to  the  graphical 
method  of  presentation  and  consequent  analysis. 

I  have  known  of  instances  where  the  most  important  and 
radical  steps  were  inspired  by  reflection  over  a  graphical  chart. 
On  the  other  hand,  there  are  managers  who  can  appreciate  only 
the  numerical  and  tabulated  figure  method  of  making  charts 
or  reports,  and  who  consider  any  conversion  of  numerical  records 
into  graphics  as  needless  waste  of  time.  It  is  well  worth  while 
for  those  who  have  not  used  graphical  methods  to  consider  that 
every  successful  manager  makes  scientific  use  of  this  imagination 
when  his  intuition  or  judgment  tells  him  that  certain  steps  are 
necessary.  If  certain  helps  to  guide  this  intuition  or  judgment 
can  be  gotten  from  graphical  charts  which  do  not  require  a  great 
deal  of  time  or  expense  to  prepare,  then  the  charts  are  certainly 
worth  while. 

Such  a  graphic  report  (Fig.  16),  showing  graphic  comparison 
of  orders  received,  orders  shipped,  and  orders  in  production, 
arranged  by  classes  of  product,  can  be  easily  prepared. 

Similarly,  other  elements  in  manufacturing  can  be  visualized. 
Fig.  17  shows  a  graphic  comparison  of  labor  and  material  costs 
with  estimated  value  of  product.  The  lowest  line  is  that  repre- 
senting supervision  and  clerical  labor.  This  will  not  vary  as 
much  as  the  other  lines;  the  next  line  is  measured  from  the  line 
just  drawn  as  a  base  line,  and  shows  the  cost  of  unskilled  labor 
(the  items  given  are  expressed  in  dollars,  and  laid  off  to  scale) ; 


64       FACTORY  ORGANIZATION  AND  ADMINISTRATION 


GRAPHIC    COMPARISON     OF 

ORDERS    RECEIVED,  (7);       ORDERS    SHIPPED.  (2):    ORDERS   IN   PRODUCTION,  (3)  : 

TYPE  OF 
MACHINE 

BELTED  DYNAMOS 

DIRECT 
CONNECTED    DYNAMOS 

LOCOMOTIVES 
5  TON   AND   UNDER 

NUMBER 

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FIG.  16.— For  the  manager  who  has  learned  the  value  of  graphic  repre- 
sentation of  facts,  nothing  can  compare  with  a  chart  as  a  means  of  getting  at 
the  essence  of  a  mass  of  figures.  The  data  given  in  this  chart  is  hypothetical 
and  the  quantities  taken  are  arbitrary.  The  value  of  the  graphical  method 
is  well  brought  out,  however,  and  the  arrangement  necessary  to  secure  the 
results  here  shown  is  applicable  to  a  great  variety  of  conditions.  The  rela- 
tive condition  of  three  of  the  facts  essential  to  the  manager — orders  received, 
orders  shipped,  and  orders  in  production — is  made  evident  at  a  glance  four 
times  a  month  throughout  the  year.  Pay-roll  periods  often  make  satisfac- 
tory intervals  by  which  to  plot  the  condition  of  production  on  a  chart,  but 
periods  suitable  to  the  business  must  be  taken, 


DEPARTMENTAL  REPORTS 


65 


while  the  third  line  is  the  cost  of  skilled  labor.     Cost  of  material 
used  in  the  month's  production  is  graphically  presented  by  line 


PS 

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" expense"  material  for 


four,  and  the  fifth  line  is  the  exact  cost  of 

the  month  for  office  and  shop  operation  and  maintenance 


The 


66       FACTORY  ORGANIZATION  AND  ADMINISTRATION 

sixth  line  represents  the  "fixed  charges,"  including  depreciation, 
interest,  and  all  other  shop  charges.  The  seventh  or  top  line  is 
measured  from  the  base  line,  and  represents  the  estimating  de- 
partment's valuation  of  the  month's  product  delivered  to  the  sales 
department,  and  not  including  selling  expense.  This  is  based 
largely  on  established  cost  values,  or  "standard  costs"  of  the 
items  produced. 

So  long  as  all  the  area  underneath  the  sixth  line  does  not  pro- 
ject above  the  seventh  line  there  is  a  likelihood  of  profit  and 
indications  are  for  efficient  production.  The  reverse  is  the  case 
when  the  sixth  line  projects. 

It  is  well  worth  while  to  put  one  or  two  experienced  cost  or 
production  department  men  at  this  estimating  work.  If  they 
are  of  the  right  caliber,  they  will  get  results  not  far  from  accurate 
without  going  to  extremes  in  detail,  and  will  be  able  to  present 
very  interesting  matter.  It  is  in  many  manufacturing  establish- 
ments wholly  impracticable  to  make  a  general  business  statement 
more  than  once  a  year.  The  nature  of  their  business  is  such 
that  an  attempt  to  close  all  records  and  show  monthly  results  is 
entirely  out  of  the  question.  Yet  the  strain  of  the  uncertainty, 
consequent  on  a  year's  wait,  can  be  relieved  by  estimates  and  by 
reports. 

Further  departmental  reports  may  cover  such  matters  as  the 
following  : 

86.  Quarterly  Reports  of  the  Most  Important  Component 
Parts. — These  should  cover  the  total  number  of  each  component 
ordered  to  be  made  during  a  quarter-year,  the  total  number 
shipped  during  the  same  period,  the  total  number  delivered  to 
shop  or  finished  parts  stock  during  the  quarter,  and  a  comparison 
of  these  data  with  the  same  items  during  the  previous  quarter- 
year.     This  report  will  serve  as  a  valuable  guide  in  establishing  a 
manufacturing  program  for  stock  of  leading  component  parts,  a 
matter  which  needs  to  be  considered  in  a  comprehensive  way, 
taking  into  consideration  capacity  of  shop  as  regards  labor  and 
equipment,  probable  sales,  etc.,  no  matter  how  automatic  the 
routine  of  reordering   for   replenishment  on  the  part  of  stock- 
record  or  production  department  clerks  may  be. 

87.  Pay-roll  Analysis. — Each  pay-roll  should  be  analyzed  so  as 
to  show  the  leading  classes  of  indirect  labor,  and  their  proportion 
to  direct  labor  by  classes  of  work  and  by  departments.     This 
requires  as  a  starting  point  the  classification  of  each  workman's 


DEPARTMENTAL  REPORTS  67 

daily  time  record  and  the  assembling  of  these  classifications  into 
pay-roll  periods  by  departments. 

88.  Money  Value  of  Direct  and  Indirect  Production. — Where 
there  is  a  complete  stores  accounting  system  installed,  it  is  pos- 
sible to  have  periodic  reports  of  the  money  value  of  the  parts 
turned  into  stock-room,  value  of  completely  assembled  product 
turned  into  stock  (all  goods  going  in  to  stock  previous  to  ship- 
ment), value  of  work  in  process  by  closing  of  cost  records  to  a 
certain  da.ter  value  of  additions  to  plant  and  equipment  made 
by  the  shop. 

89.  Purchases. — Classified  report  of  money  value  of  all  pur- 
chases during  a  given  period  compared  with  same  for  correspond- 
ing previous  periods. 

90.  Gantt  Type  of  Charts. — Mr.  H.  L.  Gantt  devised  a  type  of 
progress,  summary,  and  production  charts  which  have  come  into 
such  general  use  that  it  is  desirable  to  describe  them. 

These  charts  are  devised  to  enable  one  to  make  a  rapid  com- 
parison between  what  has  been  done  and  what  should  have  been 
done  or  what  was  expected  to  have  been  done  or  happen. 

They  are  not  substituted  for  balance  and  detailed  records  but 
are  devised  to  enable  an  executive  to  take  action  without  the 
necessity  for  looking  up  a  mass  of  figures.     These  charts  may  be 
divided  into  three  general  classes: 
1st — Summary  Charts 

2nd— Order  Charts 

3rd — Production  Charts 

Summary  Charts  show: 

1.  Requirements  by  periods  of  time,  and  total  requirements. 

2.  Contracts   placed  to  meet  these  requirements  and  total 
amounts  contracted  for  as  compared  with  estimated  requirements. 

3.  Deliveries  in  each  period  of  time  as  a  percentage  of  require- 
ments and  total  amounts  delivered. 

These  charts  may  also  show: 

4.  The  amounts  issued  in  each  period  of  time  and  total  amounts 
issued. 

An  inspection  of  these  charts  will  show: 

(a)  To  what  extent  the  requirements  have  been  covered  by 
contracts. 

(b)  To  what  extent  requirements  have  been  met  by  deliveries. 

(c)  To  what  extent  the  required  amounts  have  been  used. 
They  will  also  show: 


68         FACTORY  ORGANIZATION  AND  ADMINISTRATION 

(d)  The    amounts    still    to    be    contracted    for. 

(e)  The  amounts  still  to  be  delivered  on  contracts. 
(/)  The    amount    in    stores. 

The  Order  Charts  show  the  condition  of  each  order  for  any 
major  article.  These  are  usually  on  separate  sheets  and  at  the 
top  of  the  sheet  there  is  a  summary  for  that  article. 

The  Production  Charts  contain  a  detailed  record  by  groups  of 
components  into  which  an  article  may  be  divided;  also  a  detailed 
record  of  the  state  of  progress  on  each  component  in  the  group. 

The  important  facts  to  be  recorded  on  Production  Charts  are: 

1.  The  groups  or  items  completed; 

2.  The  groups  or  items  in  process; 

3.  The  groups  or  items  for  which  there  is  material  on  hand; 

4.  The  extent  to  which  the  scheduled  program  is  being  met. 
The  method  in  which  these  charts  are  constructed  is  as  follows: 

The  sheet  of  paper  contains  a  number  of  horizontal  lines,  and  at 
the  left  of  the  sheet  are  recorded  the  items  or  components;  at 
the  right  of  the  sheet  are  groups  of  columns  indicated  by  vertical 
lines,  each  week  being  represented  by  five,  six,  or  seven  columns. 
The  one  constant  is  time.  The  amount  to  be  done  in  the  time 
unit  is  always  represented  by  the  same  length  of  line. 

Required  and  Ordered. — The  amount  ordered,  or  contracted 
for,  for  delivery  during  any  period,  is  represented  by  a  light  line 
in  that  period,  as  a  proportion  of  the  total  amount  required. 

The  cumulative  amount  ordered,  or  contracted  for,  as  com- 
pared with  the  total  required,  is  shown  by  a  heavy  line. 

On  Hand  and  Received. — The  amount  on  hand  at  the  time  the 
chart  was  started  is  indicated  by  a  heavy  dashed  line. 

Received. — The  amount  received  during  any  period  is  repre- 
sented by  a  light  line  as  a  proportion  of  the  amount  required 
during  that  period. 

The  total  amount  received  is  represented  by  a  heavy  black  line 
as  compared  with  the  total  amount  required. 

Issued. — The  amount  iss'ued  during  any  period  is  represented 
by  a  light  line  as  a  proportion  of  the  estimated  requirement  for 
that  period. 

The  total  amount  issued  is  represented  by  a  heavy  line  as  com- 
pared with  the  total  estimated  requirement. 

Order  Charts. — A  thin  black  line  starting  at  the  beginning  of  a 
period  represents  on  the  scale  of  that  period  the  amount  received 
during  that  period,  and  a  heavy  black  line  the  total  received  to 
date. 


DEPARTMENTAL  REPORTS 


69 


Angles. — Angles  placed  opposite  a  certain  item  and  under  a 
certain  date  indicate  the  beginning  and  close  of  the  period 
covered  by  the  plan  or  expectations. 

Entries. — Actual  accomplishment  or  the  extent  to  which  the 
program  has  been  executed  is  indicated  by  short  vertical  lines 
drawn  at  right  angles  below  the  heavy  black  lines.  These 
indicate  the  point  to  which  the  cumulative  line  has  been  brought 
by  the  respective  increments.  If  no  parts  or  articles  are  corn- 


status 


Sept.l 


15 


22 


Bullets 


I  P 


MOH 


Primers 


I  P 


MOH 


Bandoliers 


I  P 


MOH 


Chests 


I  P 


MOH 


FIG.  17 A. — Gantt  type  of  production  chart. 

pleted  in  a  period,  the  letter  "Z"  indicating  zero,  is  inserted 
in  the  corresponding  time  space. 

Change  of  Schedule. — If  the  work  is  not  completed  as  scheduled 
and  a  second  schedule  is  made  for  the  amount  still  to  be  delivered, 
additional  angles  are  inserted  with  small  figures  2  or  3,  indicating 
the  limiting  time  of  the  new  schedule,  and  the  old  deliveries 
during  the  period  are  replaced  by  the  new  schedule.  These 


70         FACTORY  ORGANIZATION  AND  ADMINISTRATION 

charts  are  usually  made  on  thin  paper  so  that  they  may  be  copied 
by  blueprinting  or  reproduced  by  the  photostat  process. 

Production  Chart. — A  production  Chart  is  made  in  the  same 
manner  as  the  preceding  charts.  The  Production  Chart  will 
have  in  general  three  lines  devoted  to  each  group  of  item. 

The  first  line  will  show  the  amount  to  be  completed  during  each 
period. 

The  second  line  will  show  the  amount  to  be  started  during 
each  period. 

The  third  line  will  show  the  amount  for  which  material  should 
be  on  hand  during  each  period,  and  how  these  requirements  are 
being  lived  up  to. 

Fig.  17A  is  an  example  of  this  type  of  chart. 


REFERENCES 

CARPENTER:  "Profit-making  Management,"  Chapters  III  and  XIV. 
COOK:  "Factory  Management,"  Chapters  IV  and  X. 
GANTT:  "Organizing  for  Work,"  Chapters  V  and  VIII. 
BRINTON:  "Graphic  Methods  for  Presenting  Facts." 
HASKELL:  "How  to  Make  and  Use  Graphic  Charts." 


CHAPTER  VII 
FACTORY  LOCATION 

91.  Importance  of  Plant  Location. — The  problem  of  factory 
location  presents  two  general  aspects :  first  the  selection  of  a  given  , 
town  or  city,  and  second  the  location  of  a  factory  site  in  a  given 
town  or  city.    The  problem  of  factory  location  is  one  that  pre- 
sents  itself  to  the  industrial  engineer  who  is  working  for  the  lowest 
cost  of  production.    Location  means  everything  to  the   retail 
establishment,  it  means  less  to  the  factory  as  a  rule;  yet  its  im- 
portance is  often  overlooked.    A  well-managed  factory  may  fail 
in  a  poor  location  while  a  poorly  managed  one  often  owes  its 
very  existence  to  the  location. 

92.  Considerations  Influencing  Selection  of  a  Certain  Town 
or  City. — The  selection  of  a  town  or  city  for  a  factory  site  is 
influenced  by  considerations  regarding:  (1)  raw  material,   (2) 
labor,  (3)  transportation,  (4)  market,  and  (5)  money  outlay. 

93.  Influence  of  Raw  Materials. — So  far  as  the  cost  of  raw 
materials  is  concerned,  that  location  will  be  the  best  which  will 
make  total  resultant  freight  charges  of  all  raw  materials  the 
minimum. 

As  a  simple  example,  we  may  take  the  case  of  an  establishment 
manufacturing  paving  brick.  It  has  been  estimated  that  the 
relative  weights  of  clay,  finished  product,  and  coal  required  in  this 
industry  are  approximately  as  40,  30  and  3.  In  a  case  of  this  sort 
it  is  evident  on  a  brief  inspection  that  in  the  matter  of  choice  of 
factory  site  as  between  coal  fields,  clay  beds,  and  nearest  market 
or  distributing  center,  the  most  advantageous  point  of  location 
would  be  next  to  the  clay  beds.  Of  course,  the  combination  of 
several  favorably  influencing  conditions  will  be  more  desirable, 
such  as  clay  beds  with  cheap  fuel  close  at  hand.  Such  conditions 
exist  in  natural  gas  fields  in  several  sections  of  the  country. 

Similarly  the  best  location  for  a  blast  furnace  is  a  site  where  ore, 
coke,  and  limestone  may  most  conveniently  be  brought  together. 
About  two-thirds  of  the  Lake  Superior  ore  is  at  present  melted 
in  the  vicinity  of  Pittsburgh,  and  most  of  the  remainder  in  Ohio 

71 


72         FACTORY  ORGANIZATION  AND  ADMINISTRATION 

and  Illinois.  The  reason  for  this  is  apparent  when  one  remem- 
bers that  the  total  weight  of  fuel  required  in  furnace  work  is 
about  20  per  cent,  of  the  weight  of  the  iron  produced. 

Nearness  to  coal  is  to  be  had  in  Pennsylvania,  Ohio,  Indiana, 
Illinois,  Missouri,  Iowa,  Kansas,  Kentucky,  Tennessee  and 
Alabama.  The  Lake  Superior  region  furnishes  about  two-thirds 
of  all  the  iron  ore  in  the  United  States  and  most  of  the  remainder 
comes  from  the  Appalachian  region,  from  Maryland  southward. 

94.  Labor  Conditions  Affecting  Selection  of  Factory  Site. — 
From  the  standpoint  of  ease  of  securing  satisfactory  labor,  the 
city  presents  a  far  more  advantageous  labor  market  than  a  town 
or  country  site. 

Skilled  labor  is  most  easily  obtained  on  short  notice  in  a  city. 
In  the  country  town  labor  is  cheaper,  and  the  workmen  are  likely 
to  be  more  contented.  They  are  likely  to  marry  and  have  homes 
in  pleasant  surroundings,  and  the  inducements  for  the  wasting 
of  their  earnings  are  not  so  great  as  in  the  city.  At  the  same  time 
the  country  factory  is  looked  to  as  bound  to  exercise  a  paternal 
interest  in  the  employees  and  town — a  responsibility  from  which 
the  city  factory  is  relieved. 

A  surburban  site,  convenient  to  a  belt  railway,  such  as  exists 
in  most  of  the  larger  trade  centers,  presents  many  advantages  of 
both  city  and  country.  It  permits  the  purchase  of  sufficient 
ground  for  a  factory  site  to  allow  for  future  expansion.  It  has 
the  labor  market  of  the  city  to  draw  from  and  offers  the  workmen, 
who  choose  to  live  close  at  hand,  the  opportunity  of  pleasant  home 
sites. 

95.  Transportation  Facilities. — The  cost  of  transportation  of 
both  raw  material  and  finished  products  is  a  factor  of  vital  impor- 
tance to  the  manufacturer  who  is  at  the  mercy  of  a  single  railroad. 
Where  such  is  the  case  it  has  been  claimed  that  it  is  the  tendency 
of  the  railroad  at  first  to  show  a  willingness  to  do  everything 
possible  to  develop  a  good  trade  for  the  manufacturer,  but  after 
the  establishment  of  such  a  good  trade,  to  tax  the  traffic  all  that 
it  will  bear.    To  avoid  this  contingency  it  is  very  desirable  that 
the  location  be  such  as  to  afford  a  choice  of  several  routes  or  a 
choice  of  railway  or  water  routes  in  receiving  and  transmitting 
shipments.    As   between  railways   and  water  ways,  the   latter 
have  the  advantage  of  cheapness,  whereas  the  former  have  the 
advantage  of  greater  speed. 

A  factory  producing  an  output  of  considerable  bulk,  and  which 


FACTORY  LOCATION  73 

will  not  suffer  from  slight  moisture,  would  be  advantageously 
located  on  a  water  way.  The  greater  expense  of  railroad  trans- 
portation is  largely  due  to  the  high  speed  demanded  for  passenger 
traffic.  A  system  of  freight  railways  especially  arranged  for 
heavy  tonnage  and  moderately  slow  speeds  it  is  claimed,  would 
be  of  great  advantage  to  the  economic  distribution  of  factory 
products. 

A  location  convenient  to  receipt  of  raw  material  by  way  of  the 
cheaper  waterways,  and  at  the  meeting  of  railways,  makes  a 
most  favorable  location  for  a  factory  site.  Examples  of  manufac- 
turing centers  so  located  are  found  in  Pittsburgh,  Buffalo, 
Cincinnati,  Cleveland,  Milwaukee,  Chicago  and  St.  Louis. 

In  the  case  of  light  machinery,  or  of  any  output  in  which  the 
labor  is  considerably  greater  than  that  of  materials,  nearness  to 
raw  materials  is  of  minor  importance,  the  largest  cities  are  always 
the  best  places  for  the  securing  of  the  most  skilled  labor,  and  they 
offer  also  advantages  of  promptest  shipping  facilities  for  manufac- 
tured products,  and  of  a  sales  market  close  at  hand.  Industries  of 
this  sort  are  naturally  most  numerous  in  the  larger  cities  of  the 
country,  such  as  New  York,  Philadelphia,  Boston,  Chicago,  and 
so  on. 

It  will  be  apparent  that  numerous  cities  much  smaller  than  the 
examples  mentioned,  will  answer  many  of  the  requirements  for 
most  economic  factory  location.  While  the  history  of  the  past 
seems  to  point  toward  the  large  city  as  the  most  favored  factory 
site,  there  are  many  examples  of  success  in  the  smaller  towns. 
The  labor  agitator  finds  the  small  town  a  poor  field.  The  pleas- 
ant surroundings  and  sunshine  of  a  home  tends  toward  content- 
ment— the  worst  enemy  of  the  walking  delegate. 

96.  Sales  Market  as  Affecting  Plant  Location. — As  regards  the 
choice  of  a  town  or  city  with  reference  to  the  nearness  to  sales 
market,  it  is  quite  evident  that  the  factory  from  considerations 
on  this  score  should  be  at  the  point  from  which  it  could  ship  with 
relatively  equal  promptness  and  relative  cheapness  of  expense 
to  each  of  its  principal  sales  centers.  The  location  of  many 
factories  in  surroundings  not  at  all  favorable  to  cheapness  of 
production  has  been  due  to  the  fact  that  their  founders,  realizing 
the  local  demand,  started  the  establishment  in  the  best  sales 
market,  and,  having  usually  at  the  start  a  limited  capital,  the 
local  site  itself  was  usually  not  influenced  by  considerations  of 
what  would  be  the  best  site  for  cheap  production,  but  what 


74         FACTORY  ORGANIZATION  AND  ADMINISTRATION 

would  be  the  cheapest  site  obtainable  in  quarters  not  too  unfa- 
vorably situated. 

The  oldest  manufacturing  establishments  of  the  country  have 
been  located  chiefly  in  distributing  centers,  or  cities  where  business 
men  conveniently  meet  and  commodities  may  be  easily  exchanged. 
In  addition  to  the  advantages  from  a  selling  standpoint  such 
centers  presented  the  advantage  of  abundance  of  labor.  The 
convergence  of  railroads  in  larger  centers  of  this  sort  has  also 
offered  facilities  for  the  securing  of  raw  materials  and  shipping 
of  products. 

The  advantage  of  direct  contact  with  the  consumer  that  is 
offered  by  a  factory  in  the  large  city  is  well  worth  considering. 
Frequent  instances  may  be  found  where,  after  the  removal  of  a 
factory  which  has  found  its  city  site  disadvantageous  as  compared 
with  a  location  in  the  suburbs  or  the  country,  some  new-comer 
has  been  able  to  start  a  thriving  establishment  near  the  old 
site  with  perhaps  less  profits  but  still  reaping  the  advantage  of 
this  close  touch  with  the  market. 

The  cities  that  form  the  best  sales  markets  are  those  where 
trade-routes  meet  or  toward  which  they  converge.  Similarly  good 
sales  markets  are  afforded  by  cities  at  the  convergence  of  navi- 
gable rivers,  such  as  Pittsburgh  and  St.  Louis,  or  at  points  where 
the  limits  in  direction  of  a  waterway  necessitates  trans-shipment, 
such  as  Chicago,  Cleveland,  and  Cincinnati. 

Another  class  of  cities  forming  good  markets  is  found  in  cities 
which  are  collecting  and  distributing  points  in  an  exceedingly 
productive  region,  such  as  Indianapolis  and  Kansas  City. 

In  cases  where  the  factory  is  not  needed  as  an  adjunct  to  sales 
department,  considerations  as  to  cheapest  site,  cheapest  trans- 
portation of  raw  material  and  finished  product,  and  good  labor 
markets  should  be  of  great  importance  in  determining  the  location. 

97.  Cost  of  Plant  as  Affected  by  Site. — The  question  of  money 
layout  is  frequently  one  on  which  too  much  stress  is  layed.  It 
frequently  happens  that  the  enterprising  citizens  of  a  small 
town  are  willing  to  furnish  a  free  site  for  a  factory.  They  may 
even  go  so  far  as  to  raise  the  cash  bonus  usually  obtained  by  the 
sale  of  building  lots  in  the  vicinity  of  the  proposed  factory  site. 
Such  inducements  may  often  be  based  upon  sound  logic  and  may 
result  in  good  to  all  concerned.  There  have  been,  however, 
cases  where  even  with  such  advantages  the  factory  has  failed 
and  the  enterprising  citizens  have  lost  money  they  have  invested 


FACTORY  LOCATION  75 

in  town  lots  because  insufficient  consideration  had  been  given  to 
more  important  factors.  The  final  decision  is  only  to  be  made 
after  giving  each  its  proper  weight. 

Cheapness  of  factory  site  has  in  many  cases  formed  the  basis  of 
the  possibility  of  a  new  company  competing  with  older  companies. 

98.  Branch    Factories.— Even   the   large   corporations   which 
have  come  up  by  a  result  of  mergers  of  minor  companies  have  of 
late  years  tended  toward  the  establishment  of  a  number  of  various 
complete  plants  located  in  various  centers  in  place  of  what  seemed 
to  be  the  original  tendency,  namely  the  centralization  into  a  few 
large  plants  and  the  conducting  of  distinct  processes  or  functions 
by  each  plant  rather  than  the  making  of  the  same  product  in  more 
than  one  plant. 

It  is  possible  that  the  era  of  combination  may  be  followed  by 
just  as  rational  a  period  of  decentralization.  There  are  too  many 
intermediary  agencies  that  raise  the  cost  of  production  and 
distribution  to  make  the  centralization  and  combination  of  all 
factories  an  economic  consideration.  There  is  a  legitimate  most 
economic  territory,  and  a  corresponding  maximum  capacity  for 
economic  production,  that  points  toward  distributed  production  ' 
as  an  ultimate  condition,  even  with  centralized  capitalization. 
This  tendency  is  well  illustrated  by  the  procedure  of  the  United 
States  Steel  Corporation. 

99.  Railroads  as  an  Aid  in  Factory  Location. — The  industrial 
agents  of  railways  are  continually  gathering  and  distributing 
data  regarding  favorable  sites  for  prospective  •  industries.     In 
some  cases  their  reports  and  recommendations  indicate  careful 
study,  and  the  obtaining  of  definite  knowledge  at  first  hand. 
In  other  instances  the  data  collected  are  apparently  based  upon 
replies  to  circular  letters  addressed  sometimes  to  leading  merchants 
or  hotel  keepers,  and  sometimes  to  secretaries  of  commercial 
clubs  or  boards  of  trade.     Where  the  latter  is  the  case,  it  is 
evident  that  the  work  done  by  the  industrial  agent  is  purely 
clerical.     The  replies  sent  from  various  towns  along  the  line  are 
usually  from  people  whose  horizon  is  limited,  and  who,  for  the 
sake  of  booming  their  town,  will  always  be  willing  to  make  rosy 
reports.     If  there  happens  to  be  a  deserted  factory  building  in 
the  town,  the  enterprising  citizens  can  see  a  fine  field  ahead  for 
the  manufacture  of  almost  anything  that  could  be  suggested, 
for  the  sake  of  having  the  old  site  reoccupied  if  even  for  a  limited 
time. 


76         FACTORY  ORGANIZATION  AND  ADMINISTRATION 

So  far  as  distributive  establishments  are  concerned,  local 
advice  is  apt  to  be  valuable,  but  even  then,  personal  knowledge 
based  upon  a  visit  to  the  town  should  be  added  by  the  industrial 
agent.  On  the  other  hand,  information  regarding  location  of  pro- 
ductive industries  gathered  from  purely  local  sources  is  likely  to  be 
erroneous. 

The  country  is,  however,  full  of  real  opportunities  for  pro- 
ductive industries.  There  are  no  people  in  better  position  to 
make  a  careful  study  of  the  conditions  governing  them  than 
railway  officials.  The  ability  to  give  reliable  advice  can  be  based 
only  upon  personal  study  of  natural  resources,  trade  and  market 
facilities,  and  economic  statistics.  The  pursuit  of  such  studies, 
and  the  exercise  of  sound  judgment  consequent  upon  them,  re- 
quires a  knowledge  of  manufacturing  processes  and  industrial 
economics  in  addition  to  ability  of  high  order. 

Census  reports  and  state  departmental  reports  are  always  more 
or  less  retrospective.  The  true  function  of  the  railway  industrial 
agent  is  to  look  ahead  clearly,  making  only  such  cautious  use  of 
reports  and  statistics  as  a  sound  judgment  dictates. 

The  problem  of  selecting  a  factory  site  is  one  which  at  some 
time  or  other  is  bound  to  confront  practically  every  manufacturer. 

If  at  such  times  the  manufacturer  has  made  a  careful  study  of 
the  question  from  all  points  of  view  so  that  when  he  has  to  make 
a  purchase  of  real  estate  he  knows  exactly  what  he  needs,  he  is 
far  less  likely  to  suffer  handicap  which  may  result  in  decrease  of 
profits,  or  even  failure,  than  if  he  has  not  made  such  a  study. 

When  a  business  is  small,  high  freight  rates  on  raw  material  or 
other  disadvantages  due  to  location  of  the  plant  are  not  felt 
nearly  so  keenly  as  they  are  when  the  business  has  been  enlarged 
and  must  strive  for  a  constantly  widening  market. 

100.  Selecting  the  Site  in  a  Given  Town.- — Having  considered 
fully  the  question  of  the  location  of  the  town  or  city,  let  us  now 
take  up  the  question  of  the  picking  out  of  the  factory  site  in  that 
town. 

At  first  sight  it  would  seem  as  though,  there  were  hardly  any 
doubt  but  that  a  manufacturing  establishment,  which  uses  heavy 
raw  material  which  has  to  be  shipped  from  some  distance,  would 
be  best  located  on  a  railroad  track,  and  yet  if  we  go  through  any 
of  our  manufacturing  cities  we  find  that  in  many  of  them  probably 
the  majority  of  such  manufacturing  establishments  are  located 
away  fron  railroad  tracks.  The  small  establishment  thrives  best 


FACTORY  LOCATION  77 

near  the  great  buying  centers  which  are  usually  away  fronYtnd 
railroad  tracks  and  it  is  also  nearer  a  good  supply  of  ]abo>  than 
it  would  be  if  located  on  a  railroad  track. 

101.  Local  Trade  Centers.— There  is  also  often  an  advantage 
in  being  located  in  a  center  which  is  already  known  as  one  where 
certain  classes  of  manufacturing  prevail.    For  instance  a  clothing 
shop  would  likely  be  manifestly  out  of  place  in  a  center  devoted 
to  the  manufacture  of  machine  tools  and  vice  versa. 

102.  Local  Transportation. — In  changing  locations  in  a  given 
city  a  manufacturer  should  get  positive  knowledge  concerning 
the  cost  of  trucking  to  his  various  city  customers  and  where  there 
will  be  extra  drayage  charges  from  his  local  supplier  to  the  new 
site,  also  what  the  drayage  or  switching  charges  will  be  to  the 
various  railroads  from  his  new  site  as  compared  with  the  same 
charge  from  his  present  location. 

The  factory  site  on  a  water  way  without  railroad  facilities  is  of 
little  advantage  nowadays.  On  the  other  hand  a  location  access- 
ible by  both  water  and  railroad  is  particularly  desirable.  The 
wonderful  manufacturing  development  in  recent  years  in  such 
cities  as  Detroit,  Cleveland,  and  Buffalo,  is  evidence  of  this. 
Such  a  location  is  especially  desirable  for  industries  using  bulky 
raw  materials  such  as  timber  and  iron  ore.  Since  the  waterway 
will  serve  these  raw  materials  with  low  transportational  charges 
and  a  railway  is  convenient  for  shipping  out  finished  products, 
such  a  site  offers  especial  advantages. 

In  selecting  railroad  trackage  the  particular  class  of  raw 
material  which  may  be  found  along  the  line  of  a  certain  railway 
may  decide  the  question  of  site  in  favor  of  a  certain  railroad  even 
though  outward  shipping  facilities  on  that  road  may  not  be  as 
good  as  those  of  another.  For  instance,  a  company  making  sewer 
pipe  or  fire  brick  might  prefer  to  be  located  on  a  road  which 
passes  through  the  fields  from  which  it  draws  its  raw  material 
even  though  that  road  might  not  be  as  able  to  handle  outgoing 
shipments  as  well  as  another  railroad. 

103.  Local  Labor  Market.— Nearness  to  a  general  labor  market 
may  even  have  to  give  place  to  nearness  to  a  specialized  labor 
market.    For  instance,  there  is  a  constantly  increasing  trend  of 
machine-tool  builders  toward  the  Mill  Creek  Valley  settlement  of 
machine-tool  shops  in  Cincinnati.    A  similar  trend  of  manufac- 
turers of  automobiles  is  toward  the  favorite  driveways  of  Detroit, 
whereas  both  Detroit  and  Indianapolis  are  recognized  as  good 


73    :  FACTORY  ORGANIZATION  AND  ADMINISTRATION 


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-1 

FACTORY  LOCATION  79 

labor  markets  for  workers  on  automobiles  and  automobile  parts. 
Even  in  getting  into  the  specialized  centers,  however,  another  „ 
factor  needs  to  be  considered,  namely,  the  nearness  to  the  work- 
ing man's  home.    Other  things  being  equal,  the  working  men  will  * 
prefer  to  work  in  that  shop  to  which  they  can  walk  or  to  which 
the  street-car  trip  is  shortest,  hence  it  is  important  to  find  out 
where  the  majority  of  the  workers  live  who  are  employed  in  the 
special  industry  involved  and  to  locate  the  new  factory  near  to 
the  working  men's  homes. 

104.  Local  Sales  Centers. — Nearness  to  the  sales  center  of  a 
city  may  in  many  establishments  be  especially  important  since  ^ 
personal  visits  from  buyers  will  thus  be  encouraged.    This  is 
evidenced  in  many  of  the  jewelry  and  other  small  manufacturing 
businesses  in  our  large  cities. 

In  buying  land  at  the  outskirts  of  a  city,  the  purchaser  should 
assure  himself  of  the  adequacy  of  such  factors  as  are  dependent 
on  public  service  corporations,  such  as  supply  of  water,  light  and 
power,  and  street  railway  transportation. 

The  busy  manufacturing  plant  located  where  many  people  will 
see  it,  has  an  advertising  value  worth  many  pages  of  paid  space 
in  newspapers  and  magazines.  A  number  of  successful  auto- 
mobile factories  have  for  this  very  reason  been  located  on  roads 
which  are  favorite  drives. 

105.  Suburban  Sites. — In  considering  the  cheapness  of  a  site 
in  the  suburbs  or  outskirts,  attention  must  be  given  to  such  ques- 
tions as  cost  of  survey,  of  laying  water  and  sewer  lines,  of  road 
improvements,  of  side-walks,  of  grading  and  other  preliminary 
work;  also  the  cost  of  the  building  operations  in  a  location  where 
all  the  material  and  equipment  have  to  be  hauled  a  long  way. 

The  general  run  of  real  estate  agents  do  not  have  available 
such  data  as  are  indicated  in  the  above  outline  and  a  manufacturer  t/ 
selecting  a  site  is  lucky  if  he  can  secure  the  services  of  a  real  estate 
man  who  has  made  a  special  study  of  factory  sites  in  his  town. 
Such  a  specialist  is  likely  to  be  in  much  demand  and  will  have 
little  time  to  waste  on  promoters,  cranks  and  inventors  without 
any  real  money  to  invest. 

Fig.  18  summarizes  in  the  form  of  a  chart  the  leading  con- 
siderations with  regard  to  Plant  Location. 

REFERENCES 

DAY:  "industrial  Plants,"  Chapter  III. 
TYRRELL  :  "  Engineering  of  Shops  and  Factories,"  Chapter  II. 


CHAPTER  VIII 

THE  PLANNING  OF  FACTORY  BUILDINGS  AND  THE 

INFLUENCE  OF  DESIGN  ON  THEIR  PRODUCTIVE 

CAPACITY 

106.  Process  Mapping. — In  general  the  first  step  in  solving 
the  problem  of  laying  out  a  complete  factory  plan,  or  an  addition 
to  an  existing  plan  consists  of  the  determination  of  the  general 
processes  required  to  produce  the  various  products  of  the  estab- 
lishment, and  indicating  the  paths  followed  by  the  product  in 
passing  from  process  to  process.     The  best  way  to  begin  is  to 
take  an  existing  plant  making  the  product  under  consideration, 
or  one  nearly  like  it.     Take  one  class  of  product  if  there  are  vari- 
ous classes,  or  one  component  if  there  are  various  components. 
Draw  a  phantom  perspective  sketch  of  the   building  or  build 
a  small    skeleton    framework  of  the  building,   putting  in  the 
floors  but  omitting  the  walls  (see  Fig.  19).     If  the  phantom 
drawing  on  paper  is  used,  take  colored  crayons,  letting  a  certain 
color  of  crayon  represent  a  certain  product  or  component,  and 
follow  the  product  or  component  from  process  to  process,  from 
department  to  department,  and  from  floor  to  floor  of  the  existing 
factory.     Use  a  separate  color  of  colored  crayon  for  each  sepa- 
rate principal  product  or  principal  component  and  trace  the  proc- 
essing for  each  in  the  same  way.     If  the  small  wooden  frame 
model  has  been  used,  colored  threads  can  be  used  in  place  of  the 
colored  crayon  lines. 

107.  Routing. — Routing  is  a  more  detailed  form  of  process 
mapping,  and  consists  of  the  listing  of  every  process  on  a  com- 
ponent part.     A  general  route  map  is  usually  prepared  for  the 
various  groups  and  sub-groups  which  go  to  make  up  a  machine 
or  other  compositive  product,  and  a  route-list  is  then  prepared 
for  each  component  part.     Thus  the  distinction  between  process 
mapping  and  routing  may  be  shown  by  stating  that  in  process 
mapping,  departments  would  be  the  limit  of  differentiation;  in 
routing,  on  the  other  hand,  we  would  assign  work  to  specific 
machines.     A  still  further  differentiation  is  designated  by  the 

80 


THE  PLANNING  OF  FACTORY  BUILDINGS 


81 


82         FACTORY  ORGANIZATION  AND  ADMINISTRATION 

items  on  the  detailed  instruction  card  or  instruction  list,  which 
lists  each  distinct  step  under  the  heading  of  lathe  work,  etc. 
The  making  of  detailed  instruction  lists  is  more  fully  discussed 
in  a  later  chapter.  This  minute  subdivision  of  processes  is  not 
considered  in  connection  with  factory  planning,  but  process  map- 
ping and  routing  play  an  important  part  in  the  layout  of  build- 
ings and  departments. 

108.  Processing  Equipment. — Knowing  the  approximate  man- 
ufacturing program  or  year's  output,  it  becomes  necessary  to 
determine  the  equipment  required  for  the  production  of  a  given 
quantity  of  output.  It  is  evident  that  this  investigation  requires 
at  least  a  general  knowledge  of  the  time  standards  of  the  various 
processes. 

As  an  example  of  the  methods  to  be  pursued  in  estimating 
equipment  required  let  us  take  the  case  of  the  manufacture  of  a 
line  of  side-crank  steam  engines,  and  determine  machine-tool 
equipment  required  for  machining  the  crank  shafts: 


Size  engine 

No.  of  engines 
of  this  size  to 
be  built  in  a 

Lathe  operations  and 
time  for  one 

Total 
lathe 
time  for 
one 

Total 
lathe 
time  on 
crank 

Center 

Rgh. 

Fin. 

year 

and  face 

turn 

turn 

engine 

shafts 

H.  M. 

H.M. 

H.M. 

H.M. 

H.M. 

7&    8X10 

100 

.20 

.40 

.50 

1.50 

108-20 

9X14 

20 

.25 

.45 

1.00 

2.10 

42-20 

10  &  11X16 

20 

.25 

.45 

1.00 

2.10 

42-20 

12  &  13X18 

20 

.40 

1.00 

1.30 

3.10 

62-20 

14  &  15X20 

10 

.40 

1.00 

1.30 

3.10 

31-10 

16  &  17X22 

10 

1.00 

1.30 

1.45 

4.15 

42-30 

18  &  19X24 

5 

1.15 

1.30 

2.00 

5.15 

26-15 

20  &  22X27 

5 

1.30 

2.00 

2.45 

6.15 

31-15 

24  &  26X30 

5 

2.00 

2.30 

3.30 

8.00 

40-00 

Total  lathe  ti 

me  on  crank  sha 

f  ts  

426.30 

From  the  above  estimate  of  the  time  required  to  do  the  lathe 
work  on  a  crank  shaft  for  the  entire  line  of  engines,  it  will  be 
seen  that  there  is  426  hours  and  30  minutes  of  estimated  lathe 
time  on  the  crank  shafts.  Experiments  made  by  the  Lodge  & 
Shipley  Machine  Tool  Company  with  an  electric  recorder  wired 
to  a  contact  piece  on  the  belt  shifters  on  all  of  their  lathes  showed 
that  their  lathes  were  running  about  50  per  cent,  of  the  time. 


THE  PLANNING  OF  FACTORY  BUILDINGS  83 

By  constant  attention  for  a  period  of  six  months  they  were  able 
to  increase  this  period  to  75  per  cent.,  which  probably  represents 
as  good  an  attainment  as  is  possible.  In  most  shops  the  lathe 
may  be  estimated  as  running  not  over  one-half  of  the  time  so 
that  for  the  purpose  of  estimating  the  time  that  a  lathe  will  be 
engaged  with  a  given  class  of  work  we  must  double  the  actual 
estimated  time  of  doing  the  work.  Hence,  we  should  say  that 
the  crank  shafts  would  require  two  times  426  hours  and  30 
minutes  or  853  hours  of  lathe-department  time. 

The  immediate  conclusion  is  that  one  lathe  will  be  ample 
equipment  to  do  the  work  on  crank  shafts  and  that  it  can  also 
be  used  for  work  on  some  other  parts. 

The  above  example  is  given  to  indicate  the  process  of  esti- 
mating machine-tool  time  followed  in  going  into  detail.  In  order 
to  be  accurate  one  should,  of  course,  have  complete  bills  of 
material  covering  all  the  machines  proposed  to  be  built,  also  a 
complete  estimate  of  all  operations  on  all  parts.  This  it  will  be 
seen  is  entirely  out  of  the  question  as  the  method  to  be  pursued 
in  preliminary  work,  as  such  estimating  for  a  line  of  engines 
alone  would  require  the  constant  time  of  an  expert  for  a  number 
of  months.  One  can,  however,  make  such  generalized  investi- 
gations as  will  tend  to  put  him  on  the  safe  side  in  providing 
sufficient  machinery. 

Frequently  data  are  gathered  on  the  equipment  for  a  given 
quantity  of  output  necessary  in  the  existing  plant  or  in  other 
plants  making  a  similar  product,  such  data  serving  as  a  guide  or 
check  on  the  adequacy  of  the  equipment  for  the  proposed  new 
plant  or  extension. 

109.  Arrangement  of  Equipment. — Having  determined  on  the 
processing  equipment,  according  to  the  methods  above  indicated, 
this  equipment  must  then  be  arranged  in  the  most  advantageous 
manner  so  as  to  secure  the  least  unnecessary  traveling  and  hand- 
ling of  materials,  so  as  to  secure  the  allowing  of  abundant  space 
for  storing  of  rough  materials  and  partially  finished  product 
around  the  machinery  and  so  as  to  leave  ample  passage  for  trucks, 
industrial  railways,  cranes,  or  other  methods  of  transportation. 
Sufficient  room  must  be  allowed  to  provide  convenient  access 
to  all  parts  of  a  machine,  and  for  the  removal  of  any  machine 
when  necessary. 

It  has  been  agreed  that  the  floor  space  in  the  main  shop  is 
too  valuable  to  use  as  storage  space.  At  the  same  time  there  must 


84         FACTORY  ORGANIZATION  AND  ADMINISTRATION 

be  sufficient  work  in  sight  that  the  employees  may  see  that  they 
are  not  " working  themselves  out  of  a  job." 

Having  determined  on  the  equipment  required  in  a  given 
department  the  best  procedure  is  to  cut  paper  templets  to  scale 
to  represent  each  item  of  equipment  and  secure  final  arrangement 
by  pinning  these  templets  into  various  trial  positions  until  the 
best  possible  arrangement  has  been  secured. 

110.  Floor  Space  Occupied  by  Equipment. — In  order  that  the 
templets  may  be  of  proper  size  it  is  necessary  to  know  the  approx- 
imate floor  space  of  the  various  kinds  of  equipment  required. 
Data  of  this  sort  may  be  obtained  by  writing  to  the  manufacturers 
of  the  equipment  in  question.  As  an  example  of  the  kind  of 
data  to  be  obtained,  the  following  tables  of  floor  spaces  are  given : 

FLOOR  SPACE  OCCUPIED  BY  LATHES 

Lodge  &  Shipley  Machine  Tool  Company,  Cincinnati,  Ohio 

Swing  Space  occupied 

14  in.  37  in.  X 11  ft.  3/4  in. 

16  in.  44  1/2  in.  Xll  ft.  3  3/4  in. 

18  in.  50  in. Xll  ft.  6  3/8  in. 

20  in.  50  in.  Xll  ft.  6  in. 

22  in.  57  1/2  in.  Xll  ft.  5  in. 

24  in.  59  in. Xll  ft.  4  1/2  in. 

27  in.  64  in.  Xll  ft.  4  in. 

30  in.  67  1/2  in.  X  13  ft.  11  1/4  in. 

36  in.  67  1/2  in.  X 13  ft.  11  1/4  in. 

42  in.  78  in.  X15  ft.  1  in. 

48  in.  78  in.  X 15  ft.  1  in. 

FLOOR  SPACE  OCCUPIED  BY  RADIAL  DRILLS 

Bickford  Drill  &  Tool  Company,  Cincinnati,  Ohio 
Size  of  working  surface  Floor  space  required 

No.  1,  2  1/2  ft.  X3  ft.  90  in.  X  97  in. 

No.  2,  2  1/2  ft.X3  1/2  ft.  90  in.  X 109  in. 

No.  3,  2  1/2  ft.  X4  ft.  90  in.  X 121  in. 

FLOOR  SPACE  OCCUPIED  BY  MILLING  MACHINES 

Cincinnati  Milling  Machine  Company,  Cincinnati,  Ohio 

Horizontal  Millers 

Working  surface  Floor  space 

No.  2,  llin  X7  1/4  in.  77  3/4  in.  X92  in. 

No.  3,  13  1/2  in.  X55  3/4  in.  83  in.  X 106  1/2  in. 

No.  4,  16  1/2  in.  X64  1/4  in.  97  in.  X 125  1/2  in. 

No.  6,  19  in.  X76  1/2  in.  105  in.  X 145  1/2  in. 


THE  PLANNING  OF  FACTORY  BUILDINGS  85 

Vertical  Millers 

Working  surface  Floor  space 

No.  2,  11  in.  X7  1/4  in.  84  in.  X89  in. 

No.  3,  13  1/2  in.X55  3/4  in.  89  1/2  in.X  103  1/2  in. 

No.  4,  16  1/2  in.  X64  1/4  in.  100  in.  X 125  1/2  in. 

FLOOR  SPACE  OCCUPIED  BY  UPRIGHT  DRILLS 

Cincinnati  Machine  Tool  Company,  Cincinnati,  Ohio 

Swing  Floor  space  required 

21  in.  18in.X48in. 

24  in.  21  1/2  in.  X  58  in. 

28  in.  24  in.X 67  in. 

32  in.  26  in.X 71  in. 

36  in.  28  3/4  in.X 79  in. 

42  in.  30  in.  X  90  in. 

FLOOR  SPACE  OCCUPIED  BY  PLANERS 

American  Tool  Works  Company,  Cincinnati,  Ohio 
22  in.  X5  ft.  planer  4  ft.   8  in.  wide  by  12  ft.  long 

24  in.  X6  ft.  planer  4  ft.  wide  by  14  ft.  long 
26  in.  X6  ft.  planer                            5  ft.    2  in.  wide  by  14  ft.  long 
28  in.  X6  ft.  planer                           5  ft.    4  in.  wide  by  14  ft.  long 

30  in.  X8  ft.  planer  5  ft.    8  in.  wide  by  18  ft.  Sin.  long 

33  in. X8  ft.  planer  5  ft.  11  in.  wide  by  18  ft.  Sin.  long 

36  in.  X8  ft.  planer  8  ft.  wide  by  19  ft.  4  in.  long 

FLOOR  SPACE  OCCUPIED  BY  SHAPERS 

Cincinnati  Tool  Works  Company,  Cincinnati,  Ohio 

15  in.  shaper  60  in.  wide  by  42  in.  long 

16  in.  shaper  66  in.  wide  by  43  in.  long 
18  in.  shaper  72  in.  wide  by  46  in.  long 
21  in.  shap'er  82  in.  wide  by  53  in.  long 

25  in.  shaper  90  in.  wide  by  54  in.  long 
30  in.  shaper  98  in.  wide  by  60  in.  long 


111.  Arrangement  of  Departments.  — After  having  determined 
on  the  equipment  and  its  arrangement  in  each  department,  the 
lay-out  of  each  department  being  prepared  separately  first,  the 
next  step  is  the  arrangement  of  the  departments  and  their  sur- 
rounding buildings  with  respect  to  each  other. 

It  is  not  advisable  to  consider  proportion,  dimensions,  or  loca- 
tion of  various  departments  until  one  has  determined  for  each 
department  its  equipment,  space  required  for  same,  storage 
space,  and  passage  areas.  It  is  desirable  in  this  connection  to 


86         FACTORY  ORGANIZATION  AND  ADMINISTRATION 

investigate  data  covering  actual  equipment  in  use  in  shops 
making  the  same  or  similar  product  to  that  contemplated,  and  to 
reduce  these  data  to  such  units  as  floor  space  per  unit  of  output 
and  floor  space  per  employee. 

It  must  be  evident  that  a  wide  variety  of  output  cannot  be 
advantageously  built  in  a  single  shop.  It  sometimes  happens 
in  the  machine-manufacturing  business  that  a  single  shop  must, 
on  account  of  trade  conditions,  manufacture  both  light  and  heavy 
machinery,  or  machinery  and  light  detail  fittings.  In  such 
cases  careful  planning  of  departmental  arrangements,  equipment, 
and  organization  is  particularly  necessary,  so  as  to  keep  the  sepa- 
rate costs  of  production  of  each  type  distinct,  and  at  a  price 
reasonably  near  the  minimum  for  each  class.  Again,  it  has  been 
found  that  the  building  of  groups  of  parts  representing  a  complete 
organ  of  a  machine,  in  a  single  department,  is  often  more  likely 
to  bring  about  more  economic  production  than  an  arrangement 
in  which  all  pieces  travel  through  the  whole  shop  in  which  each 
distinct  class  of  machine  tools  is  grouped  by  itself. 

112.  Consecutive  and  Simultaneous  Processes. — The  route 
charts  for  the  various  kinds  of  product  will  indicate  that  certain 
groups  must  arrive  at  a  state  of  completion  simultaneously.     The 
departments  and  buildings  must  be  arranged  so  as  to  adapt 
themselves  to  the  equipment  and  flow  of  work,  following  always 
the  lines  of  least  resistance  as  regards  not  only  losses  in  trans- 
mission apparatus  but  losses  in  activity  of  working  men.     The 
proper  arrangement  of  departments  and  of  machines  with  regard 
to  each  other  depends  upon  statistical  knowledge  of  the  most 
predominant  paths  of  travel  of  the  material  in  process  of  manu- 
facture.    Such  observational   information    alone  can  determine 
to  best  advantage  also  the  location  respectively  of  rooms  for 
stores,  stock,  tools,  grinding,  etc.     Where  a  number  of  simul- 
taneous machine-tool  operations  must  terminate  in  a  central 
assembling  or  erecting  department  it  may  be  desirable  to  have 
two  or  more  buildings  running  east  and  west,  for  example,  contain- 
ing the  preliminary  simultaneous   operations,   these  buildings 
terminating  in  a  single  north  and  south  building  in  which  the 
assembling  and  erecting  are  done. 

113.  Use  of  Templets  in  Arranging  Departments. — Having 
determined  in  the  foregoing  manner  the  general  dimensions  of  the 
various  departments,  and  given  due  consideration  to  depart- 
mentalization by  processes  as  against  departmentalization  by 


THE  PLANNING  OF  FACTORY  BUILDINGS  87 

product,  as  well  as  to  simultaneous  and  consecutive  processes, 
templets  should  be  prepared  showing  the  general  proportions  of 
each  department,  and  these  templets  shifted  around  until  the 
most  desirable  arrangement  of  departments  with  reference  to 
each  other  is  secured. 

114.  Service    Departments. — The    process-maps    and    route- 
charts  will  be  found  valuable  guides  in  determining  to  best  advan- 
tage the  location  of  the  so-called  " service"  departments,  such 
as  rooms  for  stores  of  raw  material,  stocks  of  finished  parts, 
tools,  blue-prints,  grinding,  lavatories,  etc. 

Lockers  and  wash-rooms  should  be  so  planned  that  thorough 
discipline  and  system  can  be  maintained  with  regard  to  them. 
Good  discipline  and  system  in  these  incidental  features  is  bound 
to  react  on  the  work  of  the  shop  as  a  whole.  Workmen  should 
register  time  after  depositing  clothes,  etc.,  in  lockers,  and  not 
before,  and  location  of  lockers  and  time-clocks  should  favor  this 
method. 

115.  Visibility  of  Work  and  Economy  of  Transport. — Outside 
of  the  locker  and  wash-rooms,  the  only  portions  of  the  shop  which 
it  is  desirable  to  have  partitioned  off  and  not  subject  to  visibility 
are  such  departments  as  need  isolation  on  account  of  the  work  to 
be  carried  on  in  them  by  reason  of  gases,  smoke,  dust,  or  similar 
objectionable  features.     The  requirements  of  modern  factory 
regulations,  however,  usually  specify  exhaust  systems  for  removal 
of  all  of  these  objectionable  gases,  smokes,  dusts,  etc.,  so  that  a 
forge-shop  or  grinding  department  may  be  seen  in  modern  fac- 
tories under  the  same  roof  as  the  machine  shop  and  without  any 
separating  wall  or  partition. 

It  is  important  that  as  much  floor  space  as  possible  should  be 
visible  at  all  times.  Hence  all  "L's",  "E's"  and  "HV  should  be 
avoided  in  favor  of  the  plain  rectangle  with  all  departments  under 
one  roof. 

Economy  of  transport  demands  a  minimum  of  passage  ways. 
Passage  ways  encourage  aimless  wandering  and  loitering. 

116.  Single-floor  or  Multi-floor  Building. — Considerations  of 
visibility  and  the  avoidance  of  unnecessary  walking  or  elevator- 
riding,  argue  for  the  single-floored  structure  as  against  multi- 
floored    buildings.     Even    the    single    gallery    in    monitor-roof 
buildings  is  best  avoided,  as  it  forms  a  more  or  less  isolated  set  of 
areas  not  readily  visible,  and  increases  walking,  stair-climbing, 
elevator-riding,  and  trucking. 


88         FACTORY  ORGANIZATION  AND  ADMINISTRATION 

The  questions  as  to  whether  the  fixed  charges  due  to  increased 
cost  of  building  and  land  will  not  be  in  excess  of  the  economies  due 
to  visibility  and  economy  of  transport,  must  be  given  due  consid- 
eration. The  cheapest  type  of  building  calculated  on  the  basis 
of  fixed  charges  per  square  foot  of  floor  area,  is  a  three-story 
building  40  to  50  ft.  wide  and  100  to  120  ft.  long.  As  a  general 
rule  for  medium  heavy  and  heavy  work,  the  single-floored  build- 
ing will  show  up  favorably  even  where  land  is  costly.  The  lesser 
fire-risk  and  greater  productivity  per  unit  of  floor  area  must  be 
set  off  against  the  interest  and  other  fixed  charges  per  unit  of 
floor  area.  Moreover  a  large  tract  of  valuable  land  is  bound  to 
rise  in  value,  and  would  mean  a  greater  value  of  real  estate  in  time, 
though  it  might  also  mean  higher  taxes.  '  The  fixed  charges  should 
be  calculated  for  the  various  proposed  sites  and  types  of  buildings 
and  compared  with  estimates  of  comparative  economies  or  losses 
in  productivity. 

117.  Allowing  for  Future  Expansion. — The  site  selected,  as 
well  as  the  shape  of  the  building,  must  be  such  as  to  allow  for 
expansion.     This  demands  the  possession  of  land  enough  to  allow 
for  the  extension  lengthwise  of  a  building  and  such  lateral  expan- 
sion in  the  way  of  increased  width  of  single  buildings  or  additional 
buildings  as  may  in  time  be  needed.     One  way  of  securing 
ease  of  expansion  is  to  have  at  hand  a  plan  for  buildings  to  house 
double,  triple,  or  quadruple  the  production  at  present  planned 
for,  and  make  the  present  plans  in  such  a  manner  that  the  future 
plans  can  be  easily  worked  out. 

A  well-designed  building  will  provide  facility  of  enlargement, 
maintaining  the  same  balance  of  floor  area.  This  demands  the 
recording  of  all  increases  of  departmental  area  whenever  they  have 
become  necessary,  and  the  use  of  such  records  in  preparing  the 
designs  for  new  buildings.  It  has  been  aptly  stated  that  a  well- 
designed  factory  building  or  set  of  buildings  should  be  as  flexible 
and  adaptable  to  enlargement  as  the  "unit"  system  of  filing 
cabinets.  Fig.  20  shows  the  rear  view  of  the  factory  of  Ludwig 
Loewe  atWittenau,  near  Berlin.  It  will  be  noted  that  either  the 
saw-tooth  shop  or  either  of  the  lateral  buildings  may  be  extended 
toward  the  rear,  preserving  the  same  balance  of  area. 

118.  Service  Equipment.— By  service  equipment  is  generally 
understood  all  machinery  and  apparatus  necessary  for  running 
the  factory  and  not  constituting  processing  machinery.    Under 
the  heading  of  service  equipment  would  come  such  apparatus  as 


THE  PLANNING  OF  FACTORY  BUILDINGS 


89 


heating  and  ventilating  appliances,  lighting  apparatus,  fire  pre- 
vention equipment,  water  supply,  sewage  system,  mechanical 
transportation,  power  generation  and  transmission. 


119.  Heating  and  Ventilating  Apparatus.— With  regard  to 
heating  and  ventilating,  it  can  safely  be  said  that  the  loss  in  labor 
efficiency  and  consequent  output  per  man  due  to  faulty  installa- 


90         FACTORY  ORGANIZATION  AND  ADMINISTRATION 

tions  will  certainly  be  found  to  be  enormously  greater  than  the 
cost  of  proper  heating  and  ventilating  facilities. 

The  heating  of  most  factory  buildings  is  best  accomplished  by 
the  indirect  pressure  system,  using  the  exhaust  steam  of  one  or 
more  non-condensing  engines  as  complete  or  auxiliary  heating 
medium.  Fig.  21  is  a  view  of  the  shops  of  the  United  Railway 
Company,  Baltimore,  Md.,  showing  hot-blast  heating  apparatus 
and  exposed  distributing  ducts.  A  more  pleasing  interior  finish 
can  be  secured  by  concealing  ducts  under  floors  and  in  walls. 
This  may  involve  the  use  of  rectangular  ducts,  and  alterations  in 
length  of  the  ducts  as  they  would  be  used  if  exposed,  and  such 
alterations  must  be  designed  by  competent  engineers. 

In  many  cases  the  heating  system  has  been  very  carelessly  put 
up,  without  any  plans  or  specifications  having  been  prepared  for 
it.  As  a  result,  heating  is  often  insufficient  or  poorly  balanced, 
and  circulation  defective.  A  system  of  heating  should  always  be 
planned  by  a  competent  engineer.  Owing  to  the  very  long  pipe 
lines  necessary  in  factory  buildings  of  the  modern  type,  direct 
radiation  systems  for  factories,  even  when  designed  in  the  best 
possible  manner,  are  likely  to  have  poor  circulation  and  to  be  slow 
in  action  in  cold  days  unless  a  vacuum  system  of  circulation  is 
used.  The  hot-blast  system  of  heating  the  air  in  heating  cham- 
bers supplied  with  steam  coils,  and  delivering  it  under  pressure 
from  a  blower,  possesses  the  advantage  of  heating  a  shop  quickly 
in  the  morning,  and  of  uniformly  distributing  the  heat,  if  it  is 
properly  designed  and  installed,  so  that,  although  the  total  heat 
units  required  to  heat  the  air  will  be  theoretically  greater  than 
with  direct  radiation,  the  tremendous  gain  derived  from  uniform- 
ity of  temperature  and  comfortable  workers  will  far  more  than 
counterbalance  the  additional  cost  of  operation  when  using  the 
indirect  pressure  system,  as  compared  with  direct  radiation.  The 
pressure  is  always  outward,  hence  there  is  a  freedom  of  drafts 
and,  when  properly  installed,  an  avoidance  of  the  accumulation 
of  the  total  heat  radiated  at  the  top  of  the  building,  as  is  so  apt 
to  be  the  case  with  the  direct  radiation  system.  The  cubical 
contents  of  most  factory  buildings  are  so  large  that  sufficient 
number  of  changes  of  air  per  hour  are  secured  by  drawing  only  a 
portion  of  the  air  for  circulation  from  out  of  doors,  so  that  the 
expense  of  the  indirect  pressure  system  when  applied  to  factories 
can  be  made  a  good  deal  less  than  that  of  the  same  system  as 
applied  to  public  buildings,  where  the  cubic  space  per  person  is 


THE  PLANNING  OF  FACTORY  BUILDINGS 


91 


many  times  less  and  the  number  of  changes  per  hour  must  be 
much  more  frequent.  Of  course,  if  the  air  in  the  shop  is  vitiated 
by  the  processes  of  manufacture  going  on,  the  foregoing  remarks 
will  not  apply.  It  will  always  prove  economical  to  provide  pure 
air.  This  is  especially  true  of  a  factory  located  in  unsanitary 
surroundings,  in  which  circumstances  it  will  be  profitable  to 
provide  air  shafts  of  considerable  height  to  draw  in  pure  air  or 
provide  other  means  of  purification. 

Clean  air  as  a  money  saver  in  mercantile  establishments  and 
offices  has  not  received  the  attention  -  it  deserves.     One  can 


FIG.  21. — Hot  blast  heating  system  as  applied  to  shop  of  the  Jaxon  Steel 
Products  Co.,  Jackson,  Mich.    Courtesy  of  the  Austin  Co.,  Cleveland,  Ohio.' 

daily  see  on  display,  in  the  show  windows  of  high-grade  dry  goods 
establishments,  fabrics  and  gowns  worth  thousands  of  dollars, 
which  are  being  badly  damaged  by  sooty  and  dirty  air. 

The  same  conditions  prevail,  to  a  greater  or  less  extent, 
throughout  these  establishments.  The  depreciation  due  to  dirty 
air  could  be  reduced  90  per  cent,  by  the  introduction  of  air-clean- 
ing devices  whose  cost  is  trivial  compared  with  losses  now  taking 
place. 

Most  engineers  and  writers  on  heating  have  confined  their 
attention,  in  the  matter  of  the  use  of  the  pressure  system,  to 


92         FACTORY  ORGANIZATION  AND  ADMINISTRATION 

calculations  as  to  how  to  provide  sufficient  heat  to  overcome  the 
heat  losses  through  walls,  windows,  roofs,  floors  and  open  doors, 
and  have  apparently  failed  to  appreciate  the  importance  of  fur- 
nishing better  health  and  greater  activity  of  employees  from 
breathing  wholesome  air,  which  always  results  when  the  pres- 
sure system  is  properly  installed. 

In  a  building  thus  ventilated  there  need  be  no  drafts,  as  the  most 
healthful  conditions  are  reached  by  keeping  all  windows  tightly 
sealed.  The  outlet  of  air  is  best  secured  by  a  separate  set  of 
ducts  leading  to  the  roof. 

This  system  is  so  common  that  it  seems  almost  impertinent  to 
mention  it.  Nevertheless  it  is  equally  common  to  see  great 
black  streaks  radiating  from  the  hot-air  ducts,  showing  how  full 
of  soot  and  dust  the  air  is  which  is  forced  into  the  building,  though 
it  is  otherwise  full  of  oxygen  and  far  more  healthful  than  the  air 
furnished  by  any  other  system  of  heating  and  ventilating. 

The  black  streak,  however,  is  entirely  unnecessary,  and  can  be 
absolutely  avoided  by  proper  systems  of  air  washing — a  process 
accomplished  by  either  of  two  systems  of  spraying;  the  first 
method  is  used  where  only  a  moderate  water  supply  is  available; 
the  second,  where  abundant  water  is  at  hand. 

The  first  plan,  for  cases  where  it  is  necessary  to  be  economical 
of  water,  is  that  of  using  a  "coke"  washer.  In  this  system  the 
air  is  drawn  through  a  series  of  cages  filled  with  coke,  over  which 
fine  streams  of  water  trickle.  The  coke  absorbs  the  soot  and  dust, 
and  will  serve  in  this  way  without  replenishment  for  at  least  a 
year. 

Fig.  22  shows  a  typical  hot-blast  heater  with  coke  air  washer. 

The  second  and  better  plan  is  that  used  where  an  abundance 
of  water  is  available.  This  plan  consists  of  blowing  the  air 
through  several  curtains  of  fine  streams  of  water.  The  drying  is 
effected  by  passing  the  air  alternately  over  and  under  a  series  of 
baffle  plates.  The  centrifugal  force,  where  the  air  makes  the 
sharp  turns  about  the  edges  of  the  baffle  plates,  separates  the 
moisture  so  that  the  air  can  be  furnished  at  any  degree  of  humid- 
ity desired. 

In  order  that  there  may  be  no  discomfort  with  sealed  windows 
in  summer,  the  air  can  be  passed  over  refrigerator  coils,  making  it 
possible  to  secure  any  degree  of  coldness. 

Another  advantage,  from  the  standpoint  of  economy  as  well  as 
of  health,  accompanies  the  use  of  .air-washing  systems,  namely, 


THE  PLANNING  OF  FACTORY  BUILDINGS  93 

the  ability  to  humidify  the  air  to  any  desired  degree.  The  nor- 
mal degree  of  humidity  of  the  human  body  is  between  60  and  70 
per  cent,  and  with  this  degree  of  humidity  the  body  is  just  as 
comfortably  warm  at  65°  F.  temperature  as  it  is  at  70°  with  a  low 
condition  of  humidity,  say  15  to  20  per  cent.,  which  is  the  usual 
condition  of  artificially  heated  atmosphere  where  the  air  is  not 
humidified. 

This  means  that  a  fuel  saving  of  7  or  8  per  cent,  can  be  effected 
by  furnishing  air  of  lower  temperature  but  of  higher  humidity.  It 
should  also  be  borne  in  mind  that  it  is  seriously  detrimental  to 
health  to  breathe  air  having  so  low  a  degree  of  humidity  as  is 
furnished  by  most  heating  systems.  The  result  is  an  excessive 


FIG.  22. — Hot-blast  heater  with  coke  air  washer:  C,  screen  through  which 
outside  air  enters;  D,  tempering  coil  fed  by  steam  pipe  E;  F,  by-pass  so  air 
can  go  through  without  touching  tempering  coils;  G,  coke  air  filters  moistened 
by  perforated  water  pipe  H;  I,  catch  basin;  K,  blower;  O,  partition  permit- 
ting part  of  the  air  to  be  blown  over  heater  coils  and  part  or  all  to  be  blown 
through  ducts  without  passing  over  heater  coils. 

evaporation  from  the  membranes  of  the  body,  which  is  productive 
of  catarrhal  diseases.  In  addition,  one  is  more  apt  to  contract 
a  cold  when  passing  from  an  atmosphere  of  15°  relative  humidity 
and  70°  F.  temperature  into  outside  zero  weather  with  70°  F. 
of  humidity  than  if  the  normal  percentage  of  moisture  had  been 
maintained  within  the  building. 

Humidity  control  is  effected  through  the  agency  of  a  ther- 
mostat. This  is  possible  because  of  the  discovery  that  the 
amount  of  moisture  which  a  body  of  air  will  absorb  during  any 
given  length  of  time  in  contact  with  water  is  more  dependent  on 
the  temperature  of  the  water  than  on  the  temperature  of  the  air. 
Hence,  when  the  thermostat  indicates  that  the  temperature  of 
the  air  surrounding  it  is  changing,  it  follows  that  the  absolute 
humidity  must  be  changed  in  order  to  preserve  the  relative  hu- 


94         FACTORY  ORGANIZATION  AND  ADMINISTRATION 

midity  at  a  constant  percentage.  The  temperature  of  the  spray 
water  is  therefore  changed  by  a  steam  jet,  acting  through  a  device 
similar  to  an  injector,  over  which  the  thermostat! c  motor  has 
control.  Another  duty  which  the  spray  system  of  air  cleaning 
accomplishes  very  efficiently  is  that  of  cooling  the  ventilating  air 
in  summer.  The  entering  air  is  placed  in  contact  with  an  im- 
mense amount  of  cooling  surface,  namely,  the  total  area  of  the  water 
globular  surface.  The  air  can  thus  be  cooled  by  about  80  per 
cent,  of  the  initial  temperature  difference  between  the  spray 
water  and  the  entering  air.  In  order  to  use  the  same  water  a 
second  time,  ice  must  be  placed  in  the  settling  tank,  or  such  tank 
provided  with  brine  coils  connecting  with  a  small  refrigerating 
machine,  to  keep  down  the  temperature. 

120.  Lighting  Apparatus. — Abundance  of  light  is  as  important 
as  abundance  of  pure  air.  Natural  light  should  permeate  the 
whole  shop  during  all  hours  at  which  it  prevails  out  of  doors,  and 
not  only  work-benches  and  machines,  but  stairways  and  all  pas- 
sages, should  be  light.  The  saw-tooth  roof,  with  glass  portion 
toward  the  north,  gives  the  most  agreeable  and  diffused  light. 
It  should  be  borne  in  mind  that  with  saw-tooth  roof  construction, 
the  side  windows  in  the  walls  can  be  dispensed  with  altogether, 
although  this  practice  is  by  no  means  common.  To  determine 
how  far  inward  good  light  will  penetrate,  a  very  close  approxi- 
mation can  be  secured  by  taking  a  45°  triangle  and  laying  the  hy- 
pothenuse  along  the  extreme  edges  of  the  glass  in  either  side 
windows  or  saw-tooth  roof  windows.  In  shops  of  ordinary  height, 
this  will  limit  the  well-lighted  area  to  a  distance  of  from  20  to 
25  ft.  from  the  windows,  and  will  limit  the  width  of  the  saw-tooth 
"bays"  to  about  the  same,  unless  unusually  high  windows  are 
introduced  or  prismatic  glass  is  put  into  the  upper  window 
sashes. 

Fig.  23  shows  some  structural  details  of  the  saw-tooth  roof 
construction  used  in  the  shops  of  the  Blake  &  Johnson  Co., 
Waterville,  Conn.  An  interior  of  this  same  shop  is  shown  in 
Fig.  24,  showing  how  well  the  light  is  distributed. 

Skylights  are  generally  undesirable  on  account  of  their  admit- 
ting so  much  direct  sunlight,  and  also  on  account  of  their  liability 
to  breakage  of  glass  and  obstruction  by  snow.  In  the  case 
of  the  saw-tooth  roof,  facing  the  north,  clear  window  glass  may  be 
used,  since  it  is  never  exposed  to  the  direct  rays  of  the  sun. 
Windows  in  the  ventilating  portion  of  the  central  roof  gable  will 


THE  PLANNING  OF  FACTORY  BUILDINGS 


95 


96         FACTORY  ORGANIZATION  AND  ADMINISTRATION 


o 

II 


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THE  PLANNING  OF  FACTORY  BUILDINGS  97 

need  shades,  unless  made  of  ground  or  yellow  glass.  As  to  the 
side  windows,  except  those  facing  the  north,  they  are  exposed  to 
direct  sunlight  if  there  are  no  closely  adjacent  buildings.  Shades 
usually  receive  rough  treatment  in  a  shop,  and  are  certainly 
shortlived,  hence  opaquing  the  glass  is  usually  preferred  to  instal- 
ling shades.  If  the  nature  of  the  work  is  clean  enough  to  permit 
their  use,  buff  color  is  recommended,  since  this  variety  does  not 
shut  out  too  much  light.  Ground  or  cathedral  glass  panes 
may  be  desirable  in  certain  locations  where  it  is  advisable  to 
keep  out  direct  sunlight  or  to  obstruct  the  view  inward  or 
outward. 

Prismatic  glass  has  been  used  to  advantage  in  places  where  the 
light  requires  to  be  deflected  inward  into  the  space  desired  to  be 
lighted,  as  in  basements,  or  in  a  space  darkened  by  neighboring 
walls  or  in  top  floors  with  little  or  no  side-lights,  but  receiving 
light  from  sloping  skylights.  A  ribbed  pressed  glass  acting 
somewhat  like  a  prism  may  be  found  to  answer  in  some  cases 
where  the  more  expensive  plate-glass  prisms  might  be  considered 
too  costly. 

As  to  artificial  light,  there  is  but  one  kind  to  be  considered 
in  a  modern  establishment  having  its  own  power  plant,  and  that 
is  the  electric  light.  In  some  cases  where  the  factory  generates 
its  own  gas  it  may  be  found  that  a  carbureted  producer-gas  will 
be  more  economical  than  electric  light,  even  with  prompt  renewal 
of  Welsbach  type  of  mantles. 

As  wide  fluctuations  in  the  loads  of  electric  generators  are  ac- 
companied by  low  efficiencies,  it  will  sometimes  be  advisable  to 
have  a  distinct  engine  and  dynamo  for  lighting  purposes.  Arc 
lamps  on  the  incandescent  circuit  are  desirable  for  general  illumi- 
nation, supplemented  by  incandescents  for  individual  machines 
and  benches.  For  monitor  roofs  where  lights  must  be  high  above 
the  floor  to  afford  free  space  for  crane  service,  the  flaming  arcs 
will  be  found  advantageous.  The  mercury  vapor  lamps  are  less 
expensive  to  operate  than  the  flaming  arcs,  but  proportionally 
less  satisfactory  owing  to  the  weird  color  effects  accompanying 
their  use.  It  may  be  found  desirable  to  alternate  them  with 
flaming  arcs  to  secure  sufficient  white  light.  Good  light  demands 
that  the  wiring  be  of  ample  size  to  prevent  drop  enough  in  voltage 
to  produce  any  dulling  of  incandescent  lamps.  Wire  guards 
should  not  be  used  on  lamps  excepting  where  really  needed.  Their 
cost  and  interference  with  light  renders  it  doubtful  whether 


98         FACTORY  ORGANIZATION  AND  ADMINISTRATION 

they  are  any  real  saving.  For  delicate  work,  the  so-called 
"tipless"  incandescent  lamp  provides  the  most  perfect  illumina- 
tion, being  free  from  the  circles  of  darkness  that  are  cast  by 
lamps  sealed  at  the  bulb  end.  Some  provision  must  of  course 
be  made  for  artificial  illumination  when  the  power  plant  is  shut 
down,  by  connection  to  a  public  electric  or  gas  circuit,  or,  if  this 
is  not  available,  by  a  stock  of  oil  lamps  for  emergency  use. 

Eye-strain  causes  brain  fatigue  and  materially  deteriorates 
manual  efficiency.  Hence  careful  consideration  needs  to  be 
given  to  daylight  and  artificial  lighting.  The  efficiency  of  any 
lighting  system  depends,  not  on  the  number  of  lights  supplied, 
but  upon  the  extent  to  which  this  system  enables  the  eyes  to  per- 
form their  duties  with  least  effort  and  strain. 

With  good  daylight,  all  parts  of  a  machine  are  about  equally 
illuminated.  At  night,  however,  with  the  commonly  prevailing 
system  of  localized  lights,  the  illumination  of  machines  is  very 
uneven,  one  part  being  very  highly  illuminated  and  other  parts 
being  in  comparative  darkness.  With  suitable  diffusion,  direc- 
tion and  intensity  of  light,  operators  can  see  their  work  far  better 
with  a  low  foot-candle  value  of  illumination  than  they  can  with 
the  high  foot-candle  values  of  concentrated  illumination. 

The  eye  adapts  itself  to  artificial  illumination  in  such  a  way 
that  the  intensity  of  light  required  for  good  vision  at  night  is 
only  a  small  fraction  of  the  intensity  of  average  daylight.  As  a 
rule,  the  general  illumination  of  a  shop  at  night  is  wholly  neg- 
lected. In  order  to  read  ordinary  writing,  a  minimum  illumina- 
tion of  about  one  foot-candle  is  required.  A  good  reading  light 
should  be  about  two  foot-candles.  In  most  shops,  the  general 
illumination  falls  below  this.  A  good  indoor  daylight  illumina- 
tion needs  to  be  only  about  forty  foot-candles,  although  this 
may  be  considerably  increased  or  decreased  without  discomfort. 
Where  the  daylight  is  insufficiently  diffused,  prismatic  glass 
should  be  used. 

With  a  highly  concentrated  artificial  light  and  a  dark  field 
just  outside  this  concentrated  area,  conditions  are  such  as  invari- 
ably result  in  eye-strain.  Continued  subjection  of  the  eyes  to 
this  kind  of  illumination  results  in  decrease  of  vision  until  the 
workman  is  unable  to  perform  his  work  with  accuracy  or  rapidity. 
A  strong  objection  to  the  use  of  concentrated  lights  is  the  glare 
due  to  reflection  of  the  bright  image  of  the  light,  which  is  thrown 
into  the  eye  of  the  operator. 


THE  PLANNING  OF  FACTORY  BUILDINGS  99 

The  general  illumination  of  a  shop  should  not  be  so  inefficient 
as  to  make  it  appear  gloomy.  A  low  degree  of  general  illumina- 
tion makes  it  impossible  for  the  foremen  to  exercise  the  same  de- 
gree of  supervision  at  night  as  in  the  daytime. 

The  remedy  for  many  of  these  objectionable  features  lies  in 
the  introduction  of  suitable  illumination,  proper  care  of  lamps, 
reduction  of  the  intrinsic  light  sources,  and  improved  diffusion 
and  direction  of  light. 

121.  Fire  Prevention. — Too  much  stress  cannot  be  laid  on 
the  great  importance  of  the  absolute  fireproofing  of  such  parts 
of  buildings  as  are  intended  for  the  reception  of  the  almost 
unreplaceable  requisites  of  manufacturing,   such  as  drawings, 
patterns,  and  inventory.     Drawings  and  patterns  of  tools,  jigs, 
etc.,  are  too  often  carelessly  treated,  since  there  may  be  but  one 
article  completed  from  them,  but  their  loss  in  case  of  destruction 
of  the  tools  by  fire  would  be  enormous.     Consultation  of  the 
publications    of   the   National    Underwriter's   Association,    the 
Factory  Mutual  Fire  Insurance  Association,  various  well-known 
insurance  companies,  and  the  building  codes  of  the  various  states 
will  be  of  great  aid  in  settling  questions  connected  with  the 
installation  of  adequate  fire  prevention  equipment,  including 
such   matters   as    automatic   sprinklers,   fire  pumps,  fire  hose 
attachments  indoors  and  outdoors,  fire  walls,  fire  doors,  etc. 

122.  Water   Supply. — It   is  important  that   ample   drinking 
water  be  available,  distributed  to  sanitary  drinking  fountains 
within  easy  reach  of  all  employees.     If  there  is  any  question  as 
to  the  healthfulness  of  the  general  water  supply  of  the  factory  a 
separate  system  of  healthful  drinking  water  should  be  installed. 
Small  electric  water  purifiers  for  industrial  water  supplies  are 
now  standard  articles. 

123.  Sanitary   Engineering. — Questions    relating    to    sewage, 
baths,  and  lavatories  should  receive  the  attention  of  capable 
sanitary  engineers. 

124.  Mechanical  Transportation. — In  mechanical  transporta- 
tion equipment  are  included  cranes  and  hoists,  trolley  tracks 
and  trolleys,   automatic   conveying  apparatus,   industrial  rail- 
way equipment  and  trucks,  also  facilities  for  unloading  and  load- 
ing freight  cars  and  wagons.     In  regard  to  cranes  it  is  necessary 
to  determine  the  span  and  lift,  whether  the  main  crane  is  to  be 
motor  driven  or  hand  propelled,  whether  the  hoist  is  to  be  a  hand 
hoist  or  motor-driven  hoist,  also  whether  the  hoist  and  load 


100       FACTORY  ORGANIZATION  AND  ADMINISTRATION 

carried  is  to  run  on  a  drop  crane  which  can  make  connections 
with  similar  drop  frames  on  other  cranes  in  the  bays  so  as  to 
enable  the  hoist  with  its  load  to  be  transferred  from  the  main 
aisle  into  side  aisles. 

In  order  to  determine  the  power  required  for  driving  electric 
cranes  the  following  data  given  by  Mr.  S.  S.  Wales,  before  the 
Western  Society  of  Pennsylvania  are  useful: 

An  electric  crane  is  divided  into  three  general  parts — bridge, 
trolley  and  hoist,  each  of  which  has  its  own  motor  and  con- 
trolling system,  and  each  subjected  to  different  conditions  of 
work. 

For  the  bridge,  where  the  ratio  of  axle-bearings  to  diameter 
of  wheel  is  between  1  to  5  and  1  to  6,  the  following  table  will 
answer  our  purpose  for  weights  and  traction  for  different  spans: 

Let  L  =  working  load  of  crane,  in  tons. 

W  =  weight  of  bridge  alone  in  tons. 

W  =  weight  of  trolley  alone  in  tons. 

S  =  speed  in  feet  per  minute. 

P  =  pounds  per  ton  required. 

Span  W                                             P 

25ft 0.3L 30  Ib. 

50ft 0.6L 35  Ib. 

75  ft 1 . 0  L 40  Ib. 

100ft 1.5L... 45  Ib. 

For  the  trolley  the  weight  and  traction  may  be  assumed  as 
follows : 

L  Lb.  P 

1  to    25  tons 0.3L 30  Ib. 

25  to    75  tons 0.4  L 35  Ib. 

75  to  150  tons..  .  0.5L..  .   40  Ib. 


Power  required  for  bridge: 

(L+W+w)XPXS 
33,000 


=  horse-power. 


As  the  nominal  horse-power  rating  of  a  series  motor  is  based 
on  an  hour's  run  with  a  rise  of  75°  C.  above  the  surrounding  air, 
and  as  conditions  of  bad  track,  bad  bearings,  or  poor  alignment 
of  track  wheels  may  be  met  with,  in  factory  operation  1  1/2 


THE  PLANNING  OF  FACTORY  BUILDINGS  '  '  101 

times  the  above  result  should  be  taken  as  the  proper  size  motor 
for  the  bridge. 

For  trolley: 

Horse-power  = 


33,000 

use  factor  of  1  1/4  X  above  for  size  of  motor. 

For  hoist  assume:  1  h.p.  per  10  foot-tons  per  minute  of  hoisting. 

D.  Selby  Biggs  reports  following  results  of  a  test  (Iron  and  Steel 
Institute,  1903) : 

30-ton  crane,  25  h.p.  motors,  220  volts 
Weight 16  tons. 

Horse-power. 
Max.  Avg. 

Heaving 11.1  6.2 

Cross  travel 9.2  4.4 

Longitudinal  travel 5.5  0.6 

In  many  cases  trolley  track  and  trolleys  are  desirable  for 
mechanical  transportation  where  the  bridge  type  of  crane  would 
be  out  of  the  question.  In  laying  out  a  trolley  system  it  is  neces- 
sary to  determine  approximately  the  location  and  number  of  lineal 
feet  of  straight  trolley  rail  and  approximately  the  number  of 
feet  of  curved  rail,  the  number  and  style  of  switches,  carrying 
capacity,  method  of  attachment  of  the  trolley  rail,  number  of 
trolleys  and  carrying  capacity  of  same. 

For  sending  light  trolleys  and  light  materials  from  central 
storerooms  to  branch  storerooms,  store  service  apparatus  such 
as  cable  drives  or  pneumatic  tubes  may  be  found  very  convenient. 
The  locations  of  the  various  stations  for  such  service  should  be 
determined  in  the  plans  for  such  systems.  With  regard  to  indus- 
trial railway  equipment  the  location  of  the  tracks,  the  weight  of 
same,  also  the  gauge  need  to  be  determined,  location  of  switches 
and  turn  tables,  also  the  types  and  number  of  cars  to  be  used. 
If  locomotives  are  wanted  for  the  industrial  railway  system  we 
must  determine  whether  they  shall  be  driven  by  gasoline  engines 
or  storage  batteries  and  electric  motors. 

With  regard  to  truck  systems  the  main  routes  need  to  be  laid 
out;  also  determine  the  approximate  number  of  trucks  required, 
location  of  central  depot,  number  of  motor  trucks  to  be  used. 


102  ''FACTORt'-OttGANIZATION  AND  ADMINISTRATION 

The  open  areas  must  be  wide  enough  to  permit  the  passage  of  two 
trucks  in  the  aisles  and  the  side  tracking  of  trucks  around  the  ma- 
chines. A  truck  system  involving  the  retention  of  the  material 
in  the  trucks  with  as  little  unloading  and  reloading  and  with  as 
little  hauling  of  empties  as  possible  is  an  important  feature  and 
one  deserving  attention  in  any  establishment.  It  involves  the 
building  of  a  considerable  number  of  trucks  and  departmental 
supervision,  but  is  likely  to  result  in  economy.  In  some  instances 
trucks  are  desirably  built  so  as  to  pick  up  and  deliver  a  sheet 
steel  keg  for  holding  working  processes.  An  ample  supply  of 
metal  "tote  boxes"  for  holding  small  parts  will  facilitate  stock, 
moving  and  lessen  losses  of  small  parts.  In  some  establishments 
the  transfer  of  work  in  processes  from  department  to  department 
is  delegated  to  a  distinct  department  known  as  the  "stock- 
moving  department."  In  other  establishments  the  inspection 
department  has  j  urisdiction  over  the  stock  movers.  At  the  Lodge 
&  Shipley  Company  in  Cincinnati  an  inspector  accompanies  the 
motor  trucks  which  move  all  material  duly  inspected  from  one  de- 
partment to  another,  the  inspector  handing  the  tracing  depart- 
ment job  slips  representing  work  inspected  on  each  trip. 

125.  Power  Generation  and  Transmission. — Economy  usu- 
ally demands  the  location  of  the  source  of  power  and  heat  at  the 
side  of  the  building,  somewhat  nearer  the  end  which  is  likely  to  be 
elongated.  It  should  be  provided  with  easy  means  of  access  for 
delivery  of  fuel  and  for  removal  of  ashes.  The  use  of  sloping 
trestles  is  often  an  advantage  in  bringing  cars  to  the  level  of  upper 
floors  or  platforms  in  the  case  of  power-plant,  foundry,  etc.  A 
system  of  outdoor  tracks'  and  of  outdoor  cranes  and  power  shovels 
should  be  considered  and  provided  wherever,  on  investigation,  it 
would  appear  to  be  an  economic  move. 

In  estimating  the  total  power  requirements  we  need  to  deter- 
mine, first,  the  power  required  by  the  processing  machinery; 
second,  the  power  required  by  the  various  service  equipment 
other  than  lights;  third,  the  power  required  by  electric  lights. 

In  determining  the  power  required  by  various  machines  it  is 
desirable  to  secure  data  from  the  manufacturers  of  various 
machines  as  to  the  power  requirements  of  their  machinery.  If 
possible  these  data  should  be  accompanied  by  actual  tests  made 
in  the  work  of  the  plant  itself  or  in  a  similar  plant. 

The  following  are  typical  data  as  furnished  by  machine  tool 
builders: 


THE  PLANNING  OF  FACTORY  BUILDINGS 


103 


HORSE-POWER  REQUIRED  BY  MACHINE  TOOLS 

Lathes 
Lodge  &  Shipley  Machine  Tool  Company,  Cincinnati,  Ohio 


Swing 

Style 

Horse-power  idle 

Horse-power  aver- 
age cut 

14  in 

Cone  head. 

31 

1  73 

14  in. 
16  in. 
16  in 

Patent  head  
Cone  head  
Patent  head  .... 

.39 
.377 
53 

2.56 
1.93 
3  78 

18  in 

Cone  head 

45 

3  27 

18  in. 
20  in. 
20  in. 

Patent  head  
Cone  head  
Patent  head  

.77 
.53 
1.54 

6.28 
4.25 
10.55 

POWER  REQUIRED  BY  RADIAL  DRILLS 
Bickford  Drill  &  Tool  Company,  Cincinnati,  Ohio 
Working  surface  Idle  Average  load 

No.  1,  2  1/2  ft.  X3  ft.  3/4  h.p.  2  h.p. 

No.  2,  2  1/2  ft.  X3  1/2  ft.  3/4  h.p.  3  h.p. 

No.  3,  2  1/2  ft.  X4  ft.  3/4  h.p.  3  h.p. 

POWER  REQUIRED  BY  MILLING  MACHINES 
Cincinnati  Milling  Machine  Company,  Cincinnati,  Ohio 
Working  surface  Horse-power    Average  Motor 


No.  2,  llft.X7  1/4  in. 
No.  3,  13  1/2  in.  X  55  3/4  in. 
No.  4,  16  1/2  in.  X64  1/4  in. 
No.  5,  19in.X76  1/2  in. 


POWER  REQUIRED  BY  UPRIGHT  DRILLS 
Cincinnati  Machine  Tool  Company,  Cincinnati,  Ohio 
Swing  Average  horse-power 

3/4  h.p. 


idle 

load 

recommended 

1/2  h.p. 

3  h.p. 

5  h.p. 

3/4  h.p. 

5  h.p. 

7  1/2  h.p. 

Ih.p. 

7  1/2  h.p. 

10  h.p. 

1  1/4  h.p.' 

10  h.p. 

12  1/2  h.p. 

21  in. 
24  in. 
28  in. 
32  in. 
36  in. 
42  in. 


1  1/2  h.p. 

2  h.p. 

2  h.p. 

3  h.p. 
3  h.p. 


HORSE-POWER  REQUIRED  BY  PLANERS 
American  Tool  Works  Company,  Cincinnati,  Ohio 

22  in.  and  24  in.  planers  2  1/2  to    3  1/2  h.p. 

24  in.  to  30  in.  planers  4         to    5          h.p. 

30  in.  to  36  in.  planers  6         to    8          h.p. 

36  in.  h.p.  12         to  15  h.p. 


104       FACTORY  ORGANIZATION  AND  ADMINISTRATION 

HORSE-POWER  REQUIRED  BY  SHAPERS 
American  Tool  Works  Company,  Cincinnati,  Ohio 

15  in.  shaper  1  1/2  to  2  1/2  h.p. 

16  in.  shaper  2         to  3         h.p. 
18  in.  shaper                                              2         to  5  1/2  h  p. 
21  in.  shaper                                              3         to  6         h.p. 
25  in.  shaper                                              4         to  6         h.p. 
30  in.  shaper                                              5  1/2  to  7  1/2  h.p. 

HORSE-POWER  REQUIRED  BY  SHAPERS 
Cincinnati  Shaper  Company,  Cincinnati,  Ohio 

H.p.  idle        H.p.  light        H.p.  med.      H.p.  heavy 

load                 load  load 

16  in.  G.  G.                     0.5                0.75                  1.0  2.0 

16  in.  E.G.                      1.0                 2.0                     3.5  5.0 

20  in.  B.  G.                      1.2                 2.5                     4.0  6.0 

24  in.  B.  G.                      1.5                 3.0                     5.0  7.0 

HORSE-POWER  REQUIRED  BY  GEAR  CUTTERS 
Cincinnati  Shaper  Company,  Cincinnati,  Ohio 

H.p.  idle         H.p.  light       H.p.  med.      H.p.  heavy 

load  m  load  load 

26X10  0.8  1.5  "  2.5  4.0 

36X12  1.2  2.0  4.0  6.0 

A  number  of  data  on  horse-power  required  for  driving  machine 
tools  are  given  in  data  sheets  from  Machinery,  No.  12,  September, 
1902. 

The  average  power  losses  in  a  motor  shaft  drive  and  counter- 
shaft are  given  by  C.  H.  Benjamin  as  25  per  cent.,  hence  after 
having  determined  the  horse-power  required  by  the  various 
machines  25  per  cent,  should  be  added  for  the  losses  due  to  shaft, 
countershaft  and  belt  drive. 

126.  Floors. — Factory  floors  are  often  responsible  for  much  dis- 
comfort. The  wood  floor  is  the  only  one  that  is  conducive  to 
c6mfort,  since  wood  is  a  poor  conductor  of  heat.  Hence  the 
wooden  shoes  worn  in  many  cold  and  earthen-floored  foreign 
shops,  the  object  being  to  keep  the  feet  less  cold.  A  wood  sur- 
face on  concrete  floors  is  advantageous  for  other  reasons  than  those 
of  comfort.  The  dust  from  concrete  when  it  is  abraded  is 
injurious  to  machined  surfaces.  Moreover,  a  wood  floor  furnishes 
a  good  grip  for  bars  used  in  moving  heavy  castings,  machines, 
etc.  Short  lengths  of  hard  maple,  even  of  poor  grade,  are  to  be 
preferred  to  softer  woods  for  flooring.  The  short  lengths  facili- 


THE  PLANNING  OF  FACTORY  BUILDINGS  105 

tate  repairing.  The  best  floors  for  factories  are  constructed  of 
3-in.  yellow  pine  flooring,  grooved  on  both  sides  and  with  sepa- 
rate tongues.  The  separate  tongue  makes  it  possible  to  take 
up  and  remove  or  repair  the  floor  with  very  little  waste.  This 
yellow  pine  floor  is  next  covered  with  a  sound  deadener  of  tarred 
paper,  and  on  top  of  this  is  placed  the  surfacing  of  3/4-in.  hard 
maple. 

For  heavy  machines  and  on  testing  floors,  metal  floor  plates 
with  "T"  slots,  sunk  in  concrete,  are  often  desirable. 

In  ground  floors  made  of  concrete  with  wood  surfaces,  it  has 
been  found  that  asphalt  or  coal  tar  mixed  with  the  concrete,  or 
used  as  a  surfacing,  prevents  the  rise  of  moisture  through  the  con- 
crete to  the  hard-wood  surfacing.  The  most  satisfactory  ground 
floors  are  constructed  with  steel  "I"  beams,  laid  in  concrete,  with 
asphalt  moisture-proof  coat  and  hard-wood  surface.  ' 


127.  Structural  and  Architectural  Details. — In  designing  fac- 
tory buildings  considerations  of  utility  and  economy  must  come 
first,  and  architectural  effects  must  subserviently  adapt  themselves 
to  these  prime  requisites.  The  building  must  be  designed  with 
regard  to  intake  and  output,  adapting  the  arrangement  to  the 
equipment  and  flow  of  work,  following  always  the  lines  of  least 
resistance  as  regards  both  losses  in  transmission  apparatus  and 
losses  in  activity  of  live  operators. 

The  general  form  of  the  framing  of  the  building  designed  to 
conform  with  the  ideas  suggested  will  not  include  many  varieties. 
It  may  have  the  central  monitor  with  sloping  sides,  the  central 
monitor  with  saw-tooth  construction  on  the  sides,  or  the  entire 
shop  may  be  of  the  saw-tooth  roof  construction.  The  central 
monitor  gives  a  more  pleasing  architectural  effect  than  the  saw- 
tooth roof  over  the  whole  building,  although  the  monotony  of  a 
saw-tooth  roof  structure  is  easily  relieved  by  a  multi-floored  ad- 
ministration portion.  Fig.  25  is  a  view  of  the  Potter  &  Johnston 
Co.  factory  at  Pawtucket,  R.  I.,  a  good  example  of  the  last- 
mentioned  style. 

It  is  not  the  aim  of  this  presentation  to  take  up  such  features 
of  building  construction  as  have  not  directly  to  do  with  the  pro- 
ductive output.  Hence  it  will  be  unnecessary  to  treat  of  such 
matters  as  materials  for  foundations,  side-walls,  framework, 
roof,  paint,  etc.,  excepting  to  reaffirm  the  general  statement  that 
inasmuch  as  interest  and  depreciation  affect  costs  of  production, 
as  they  are  greater  or  less,  so  it  is  desirable  to  construct  that  type 


106       FACTORY  ORGANIZATION  AND  ADMINISTRATION 

of  building  which  will  result  in  least  total  sum  of  combined  in- 
terest, depreciation,  and  insurance. 

The  very  cheapest  factory  building  can  be  constructed  of  wood 
framing  of  just  sufficient  strength  to  withstand  the  stresses  to 
which  it  is  subjected,  and  covered  with  corrugated  steel  siding 
and  tar  paper  or  asbestos  paper  roofing.  Such  construction  in- 
volves a  rather  high  insurance  rate,  high  cost  for  heating,  de- 
preciates rapidly,  and  is  unsafe.  The  slow-burning  type  of  wood 
construction  uses  much  heavier  timbers  for  framing  and  thick 
flooring,  the  idea  being  that,  coupled  with'  a  good  automatic 
sprinkling  system,  no  fire  can  gain  great  headway,  and  that  only 
the  surfaces  of  timbers,  or  certain  sections  of  the  building,  will 
be  destroyed.  The  slow-burning  all-wood  type  of  construction 
is  apt  to  be  no  more  expensive  and  a  better  fire-risk  than  light 
steel  and  brick  construction.  A  more  permanent  building  than 


FIG.  25. — Factory  of  Potter  &  Johnson  Co.,  Pawtucket,  R.  I.,  showing 
administration  front,  saw-tooth  shop,  and  power  plant,  all  practically  under 
one  roof. 

the  all-wood  slow-burning  type,  and  a  better  fire-risk  than  the 
light  steel  and  brick,  is  presented  in  the  brick  and  wood  slow- 
burning  type  of  construction.  This  last-named  type  of  construc- 
tion is  apt  to  fill  in  most  cases  the  requirement  of  that  type  of 
building  which  presents  the  lowest  combined  charges  for  interest, 
depreciation,  and  insurance,  although  its  cost  is  but  slightly  ex- 
ceeded by  a  construction  of  reinforced  concrete,  which  will  be 
accompanied  by  still  lower  fire  insurance  rates.  Reinforced 
concrete  presents  difficulties  in  tearing  down  which  may  in  some 
cases  cause  a  preference  for  slow-burning  brick  and  wood. 

In  designing  a  building  it  must  be  borne  in  mind  that  while 
it  must  be  so  planned  as  to  place  to  greatest  advantage  the  ma- 
chinery of  manufacture,  there  will  always  be  a  great  deal  of  work 
that  depends  upon  human  attendance,  and  that  it  is  just  as  im- 


THE  PLANNING  OF  FACTORY  BUILDINGS  107 

portant  that  the  human  machinery  be  provided  with  such  sur- 
roundings and  arrangements  as  will  make  it  the  most  efficacious. 
Such  arrangements  are  too  often  looked  upon  as  philanthropic  or 
advertising  measures,  when  in  fact  they  are  part  of  the  productive 
equipment.  The  output  of  man  as  a  machine  is  regulated  first 
of  all  by  the  amount  and  quality  of  fuel  or  nourishment  supplied, 
as  food  and  air  and  heat.  Poor  air  and  insufficient  light  and 
warmth  inevitably  result  in  poor  work,  both  as  regards  quantity 
and  quality,  even  though  the  workers  might  be  picked  for  their 
cheerful  and  sunny  dispositions.  But  another  factor  enters, 
namely,  that  of  contentment.  Agreeable  and  healthful  sur- 
roundings will  tend  more  than  anything  else  to  remove  the  chief 
cause,  next  to  lack  of  proper  and  sufficient  vital  supplies,  which 
is  responsible  for  diminished  labor  efficiency,  namely,  discon- 
tent. Hence  it  becomes  important  to  consider  what  features 
of  building  construction  influence  comfort. 

Except  when  specific  reasons  to  the  contrary  appear,  the 
cheapest  building  is  to  be  constructed  in  which  it  is  physically  pos- 
sible to  do  the  work  well.  A  building  must  provide  shelter  from 
weather,  afford  good  light  and  ventilation,  and  must  be  able  to 
resist  all  stresses  to  which  it  is  subjected  by  equipment  and 
employees,  besides  offering  reasonable  resistance  to  weather  and 
conflagration.  Beyond  these  considerations  any  additional 
elaborations  are  excusable  only  when  charged  to  advertising 
account. 

For  psychological  reasons  it  is  desirable  that  the  building 
present  a  pleasing  appearance  rather  than  that  of  an  ugly 
monster  or  prison.  Hence  any  architectural  artifices  are  to  be 
commended  that  will  relieve  monotonous  continuity,  such  as  in 
the  case  of  a  long  building,  the  use  of  projecting  pilasters,  which 
also  add  to  the  rigidity  of  the  structure,  or  the  use  of  external 
projections  for  elevator  shafts,  stairways,  or  lavatories,  if  such  a 
location  is  found  otherwise  desirable.  Where  a  low  building  with 
central  monitor  and  single  gallery  is  used,  it  may  be  desirable  to 
have  elevators  and  stairways  at  the  inside  of  the  gallery  on 
account  of  their  thus  feeding  a  wider  territory  with  a  shorter 
amount  of  walking  and  hauling  than  they  would  if  placed  at  the 
outer  walls. 

An  architect  with  an  eye  for  beauty  will  know  of  many  devices 
for  making  an  ugly  sky-line  pleasing,  converting  a  plain  stairway 
at  the  front  or  side  of  a  building  into  a  pleasing  terrace,  etc. 


108        FACTORY  ORGANIZATION  AND  ADMINISTRATION 

When,  by  reason  of  increased  business,  a  manufacturing  estab- 
lishment finds  it  necessary  to  erect  an  extension  or  to  put  up  a 
new  plant,  the  progressive  firm  seldom  plunges  headlong  into 
building.  The  necessity  for  alteration  leads  to  a  careful  investi- 
gation of  such  matters  as  the  travel  of  work  through  the  factory, 
the  maintenance  of  proper  balance  of  floor  area,  the  provision  for 
a  rational  growth,  an  investigation  of  processing  and  service 
equipment,  and  other  important  considerations. 

128.  Employment  of  Professional  Industrial  Engineers  to 
Aid  in  Planning  of  Buildings. — In  the  planning  of  extensions  and 
new  buildings,  the  owners  of  a  business  will  usually  find  it  most 
profitable  to  employ  the  services  of  an  experienced  industrial 
engineer  or  firm  of  industrial  engineers  to  relieve  their  own  super- 
intending staff  from  the  additional  labor  involved  in  such  plan- 
ning— a  strain  which,  without  outside  assistance,  might  seriously 
handicap  the  regular  productive  work  of  the  factory.  "Usually 
the  industrial  engineer  should  be  retained  and  allowed  to  com- 
plete his  plans  and  reports  prior  to  the  engagement  of  an  architect, 
as  the  structural  and  architectural  features  cannot  be  intelli- 
gently handled  until  the  industrial  engineer's  work  is  practically 
completed.  Conferences  and  consultations  should  be  arranged 
for  between  the  architects  and  industrial  engineers  before  final 
contracting  is  done. 

REFERENCES 

ENNIS:  " Works  Management,"  Chapter  X. 

TYRRELL:  "Engineering  of  Shops  and  Factories,"  Chapters  III  to  XXX. 
PERRIGO:  "Modern  Machine  Shop  Construction,  Equipment  and  Man- 
agement," Chapters  I  to  XV. 
DAY:    "Industrial  Plants." 
SCHNEIDER:  "Specifications  for  Buildings." 


CHAPTER  IX 
PERSONNEL  DEPARTMENT 

129.  Personnel  Organization.— Recent  years  have  witnessed 
the  evolution  of  what,  was  formerly  known  as  the  labor  bureau 
or  employment  department  into  a  much  bigger  and  more  im- 
portant factor  in  general  management,  now  recognized  more 
generally  by  the  name  of  " Industrial  Relations"  or  " Personnel 
Department." 

;•  The  ordinary  activities  of  a  modern  Personnel  Department 
may  be  grouped  under  the  following  divisions : 

1.  Male  Employment  Division,  including  contact  with  sources  of  supply, 
selection  and  placement  of  male  employees. 

2.  Female   Employment   Division,   including   contact   with   sources   of 
supply,  selection  and  placement  of  female  employees. 

3.  Educational    Division,    including    shop    training,    vestibule    school, 
apprentice  school,  night  classes. 

4.  Safety  Engineering  and  Compensation  Division,  including  sanitation 
and  working  conditions  in  general. 

5.  Medical  Division,  including  physical  examination,  hospital,  visiting 
nurses,  matrons,  and  direction  over  rest  rooms. 

6.  Recreational  Division,  including  athletics,  social  clubs,  lunch  rooms, 
etc. 

7.  Records  Division,  including  service  and  efficiency  records,  payrolls 
and  statistics. 

8.  House  Organ  Division,  covering  the  management  of  the  Company 
newspaper  for  employees. 

9.  Pass  and  Service  Division,  including  the  issuance  of  passes,  the  assign- 
ing of  lockers  and  locks,  management  of  sales  and  loans  to  employees,  and 
taking  charge  of  clearances  and  unclaimed  wages,  etc. 

10  Industrial  Relations  and  Wage  Adjustment  Division,  including 
transfers,  promotions,  grievances,  wage  adjustments  and  direct  tie-up 
of  Personnel  Department  with  shop  foremen. 

11.  Administration,  organization  and  control  of  labor  policies  and  above 
divisions.  This  is  covered  by  the  Head  of  the  Personnel  Department  and 
his  personal  staff  of  supervisors. 

130.  Employment. — It  is  best  to  have  the  Male  and  Female 
Employment  Divisions  under  independent  control.     A  capable 
woman  has  much  more  freedom  to  exercise  her  good  judgment 
if  she  is  put  in  complete  charge  of  female  employment. 

109 


110         FACTORY  ORGANIZATION  AND  ADMINISTRATION 

The  Employment  Divisions  have  to  deal  with  determination 
of  available  sources  of  supply,  planning  of  methods  of  recruiting 
and  advertising,  ascertaining  and  recording  the  shop  and  office 
labor  requirements;  must  survey  labor  conditions  and  rates  of 
pay  of  other  plants,  see  that  applications  for  employment  are 
made  out  correctly,  determine  the  priority  of  requisitions,  re- 
cord progress  in  filling  requisitions  for  help,  interview  and  hire 
applicants. 

131.  Job   Analysis   and    Specifications. — The  eagerness  with 
which  engineers  adopted  time  study  and  planning  department 
methods  and  the  wonderful  results  obtained  from  these  methods 
were  so  engrossing  that  until  within  the  last  few  years  little 
attention  was  paid  to  an  equally  important  part  of  Dr.  Taylor's 
philosophy  of  scientific  management.     I  refer  to  that  portion 
in  which  he  defines  scientific  management  as  follows : 

".  1st.  The  determining  in  each  industry  of  the  peculiar  science  of  that 
industry  by  gathering  information  from  all  sources.  These  sources  might 
include  laborers,  office  boys,  janitors,  salesmen,  mechanics,  accountants, 
and  in  fact,  anyone  connected  with  the  industry. 

2nd.  The  systematizing  of  these  data  into  principles,  laws,  and  instruction. 

3rd.  The  study  of  the  work  as  it  s  related  to  the  men. 

4.  The  study  of  the  type  of  man  required  for  each  class  of  work. 

5th.  Bringing  the  science  to  the  men. 

It  is  quite  evident  that  the  modern  terms  of  shop  analysis,  men 
specifications,  and  shop  training  schools  indicate  merely  a 
natural  evolution  of  Dr.  Taylor's  conceptions  of  the  human 
problems  involved.s 

Fig.  25A  is  a  typical  job  analysis  .or  man  job  specification. 

132.  Desirable    Qualifications   of    Employees. — Taylor    lists 
the  following  nine  qualities  as  those  which  he  states  go  to  make 
up  a  well-rounded  man:  (1)  brains;  (2)  education;  (3)  special  or 
technical   knowledge;  manual   dexterity  or   strength;  (4)  tact; 
(5)    energy;  (6)    grit;  (7)    honesty;  (8)    judgment   or   common 
sense;  (9)  good  health.     He  adds  that  plenty  of  men  who  pos- 
sess only  three  of  these  qualities  can  be  hired  at  any  time  for  la- 
borer's wages;  add  four  of  these  qualities  together  and  you  get  a 
higher-priced  man;  the  man  who  combines  five  of  these  qualities 
begins  to  be  hard  to  find.     Those  with  six,  seven,  and  eight  are 
almost  impossible  to  get. 

Doctor  Katherine  Blackford  sets  forth  as  fundamental  require- 
ments of  all  employees:  health,  intelligence,  honesty,  and  indus- 


PERSONNEL  DEPARTMENT  HI 

try.  Doctor  Blackford  has  gathered  interesting  statistics  show- 
ing according  to  her  deductions  definite  relationships  between 
texture  of  skin  and  flesh,  physiognomy  and  complexion,  and 
psychologic  characteristics. 


Kind  of  work Shop Symbol 

Description Heavy Light Medium Hauling Lifting... 

Clesn Dirty,  _    .-Medium Hot Sitting Walking Standing.  . 


Day  Work Low High Ave. Overtime. 

Earnings 

Piece  Work Low__.High Ave.__ 


PROMOTION BREAKING  IN  PERIOD 

SPECIFICATION Male Female 

Weight Height Eyesight Age__ 

Education.  _NS PS HS COL 

Prerequisite  experience 

English,  Understand Talk___Write 

Arithmetic:  Add Subtract Multiply___Divide_ 

REMARKS 


Date. 


FIG.  25 A. — Job  analysis  or  man  job  specification,  (Card  8"  X  5"). 

Sheldon  classifies  qualities  of  men  as  (1)  mental  faculties 
(objective)  including  reasoning,  judgment  and  recollection; 
(2)  mental  faculties  (subjective)  including  intuition,  memory  and 
emotion;  (3)  physical  qualities,  including  health,  strength  and 
vigor;  (4)  moral  qualities  including  honesty,  industry,  loyalty, 
enthusiasm  and  temperance. 


112       FACTORY  ORGANIZATION  AND  ADMINISTRATION 

Doctor  Blackford's  mode  of  classification  affords  a  good  basis 
for  systematic  selection  of  men.  Sheldon's  philosophy  is  founded 
on  the  belief  that  by  training,  suggestion  and  education,  latent 
positive  or  desirable  qualities  can  be  developed,  and  negative 
qualities  and  habits  eliminated.  Sheldon's  philosophy  should 
prove  useful  in  the  upbuilding  of  an  existing  set  of  employees  to 
higher  standards. 

Vocational  guidance  bureaus  are  beginning  to  gather  data 
based  on  psychologic  and  physical  measurements  and  records  of 
family  history,  environment,  and  education,  which  will  prove 
of  inestimable  value  in  the  future  in  the  matter  of  selection  of 
employees  for  given  work  and  the  selection  of  the  most  appro- 
priate work  for  given  individuals.  If  we  combine  Sheldon's 
philosophy  of  the  certain  possibility  of  improvement  with  Dr. 
Blackford's  methods  and  the  methods  of  vocational  guidance 
bureaus,  we  can  easily  refute  the  notion  that  there  is  any  fatal- 
istic predestination  as  to  the  occupation  of  every  individual; 
vocational  guidance  supplies  for  the  present  only  the  best  man 
for  a  given  job  and  the  best  job  for  a  given  man.  It  does  not 
follow  at  all  that  that  man  must  spend  his  life  at  that  job.  It 
lies  with  the  individual  man  and  with  his  employers  to  fit  him 
for  greater  efficiency. 

Doctor  Munsterberg  has  made  some  most  interesting  studies 
in  determining  the  qualifications  required  for  greatest  efficiency 
in  certain  occupations  such  as  telephone  service,  electric  railway 
service,  ship  service,  etc.  The  correctness  of  his  tests  is  proven 
by  the  certainty  with  which  the  tests  reveal  individuals  fitted 
for  the  employment  for  which  the  tests  have  been  devised,  and 
eliminate  those  not  fitted  for  it. 

Munsterberg  selects  three  purposes  of  business  life:  (1)  To 
find  the  men  whose  qualities  make  them  best  fitted  for  the  work 
they  have  to  do;  (2)  to  find  the  psychologic  conditions  which  will 
secure  the  greatest  and  most  satisfactory  output  of  work  from 
every  individual;  (3)  to  produce  most  completely  the  influences 
on  human  minds,  which  are  desired  in  the  interest  of  business^ 
In  other  words,  we  must  answer  the  questions  how  to  find  the 
best  possible  man,  how  to  produce  the  best  possible  work,  and 
how  to  secure  the  best  possible  effects. 

133.  Requisitioning  Help. — All  help  should  be  requested 
through  the  medium  of  requisitions  made  on  the  Personnel 
Department.  Requisitions  for  office  help  should  all  pass  through 
the  Office  Superintendent  or  a  person  delegated  by  him,  to 
determine  priorities,  check  wages  and  salaries,  etc.  In  a  similar 


PERSONNEL  DEPARTMENT 


113 


manner  all  requisitions  for  shop  help  should  pass  through  the 
hands  of  the  Manufacturing  Superintendent  or  a  person  desig- 
nated by  him,  to  take  care  of  priorities  and  wages  and  to  follow 
up  the  requisitions  as  to  their  execution. 


REQUISITION  FOR  OFFICE  HELP 

COVERING  ONE  PERSON  ONLY 

DATE  WRITTEN 

DEPARTMENT 

DIVISION  OR  SECTION                           LOCA 

TION                 DATE  WANTED 

MALE                                          AGE 
FEMALE                                      TO 

STARTING  SALARY 
TO 

POSITION 

DO  YOU  CONSIDER  THIS 
POSITION   PERMANENT 

IF  TEMPORARY,  FOR 
WHAT  PERIOD  OF  TIME 

DUTIES  OF  POSITION 

SHOULD  THE  EMPLOYEE    BE.A  GRADUATE  OF 

GRAMMAR                   HIGH                             I  BUSIN 
SCHOOL                     SCHOOL                      |  COLLE 

.58                               COLLEGE                                                              SPECIA 
3E                                 COURSE                                | 

L  COURSE  IN 

EXPERIENCE  REQUIRED 

NECESSITY    FOR  THIS.ADOITIONARY  HELP 

ENLARGING  FORCE                           |  REPLACEMENT                              |  |"°R™GE 

1  TEMPORARY  RUSH 

EXPLANATION 

ADDITIONAL  FL  RNITURE  OB 
EQUIPMENT  NECESSARY 

SIGNED 

APPROVED                                                                  CHE 

CKED 

CHIEF  CLFRK  OR  OFFICE   * 

EAO                                                    OEPT     HEAD 

OFFICE  SUPT 

POSITION 
Fll  1  ED    ON 

BY 

REQ'N 

DATE 

NAME  OF  NEW   EMPLOYEE 

FIG.  255.— Requisition  for  office  help,  (4"X  6"). 


REQUISITION  FOR  SHOP  HELP 

(ONLY   ONE   CLASS  OF  WORK   ON    A  REQUISITION) 
SHOP                                                                 DATE  FILED                                                           DATE   WANTED 

MALE 
REQUIRES                                          FEMALE    FOR 

(CLASS  OF  WORK) 

DEFINITE  DETAILS 
THIS  POSITION  REQUIRES  THE  FOLLOWING  QUALIFICATIONS  AND  TRAINING 

ITAIL             HEAVY          ENGLISH         ENDURANCE 

STRENGTH           MECHANCIAL          TECHNICIAL      I 

1 

PERMANENT  OR  TEMPORARY 

If  TEMPORARY 
PROBABLE 
DURATION 

RATE,  DAY  WORK 

CHANCE 
PROBABLE  PIECE  WORK  RATE                                        PROMOTION 

SIGNED  BY 

APPROVED  BY 

FOREMAN  OR  PROCUCT 
REQUISITION  FOR  SHOP  HEI 

ION  OVERSEER                                                                                        GENERAL  FOREMAN 

•'  "    *  "                                                                             PRODUCTION  SUPERINTENDENT 

FIG.  25C.— Requisition  for  shop  help,  (4"  X  6"). 

Fig.  2oB  shows  a  typical  requisition  for  office  help  and  figure 
25C,  one  for  shop  help. 

8 


114       FACTORY  ORGANIZATION  AND  ADMINISTRATION 


134.  Applications  for  Employment. — A  form  to  be  used  in 
keeping  record  of  applications  for  employment  is  shown  in  Fig.  26. 
These  applications  are  best  filed  according  to  the  kind  of  work, 


APPLICATION   FOR   EMPLOYMENT. 


Kind  of  work  wanted. 
Name    


Street  Address. 
Date  of  Birth  _ 
Married? 


Town. 


Place  of  Birth- 


Served. 


.years  Apprenticeship  with 


Previously  employed  as  follows: 


FROM 

TO 

WITH  WHAT  COMPANY 

IN  WHAT  CAPACITY 

Wages  expected . 


Do  you  belong  to  any  Labor 


(Last  line  not  to  be  filled  by  Applicant.) 


FIG.  26. — Application  for  employment  record.     White  card,  6  inches  wide, 

4  inches  high. 


Name  ofEmploi 
Date  Employed 

in 

EMPLOYMENT   RECORD. 

("APPLICATION  FOR  EMPLOYMENT"  CARD  TO  BE  FILED  WITH  THIS  CARD.) 
ifi                                                                                                  nheeJr.  JVft. 

as 

He 

partment.         Hate  of  Wag 

fliinn 

RS 

Employment  approved  b 
RECO 

u 

zrintendent. 

RD  OF  SERVICE  AND  ADVANCES  IN  WAGES. 

Date  of 
Report 

Quality 
of  Work 

Quantity 
of  Work 

Cleanli- 
nets 

Proficiency 
and 

Disposition 

Punctu- 
ality 

Date  of 

Advance- 
ment 

Advanced 
to 

Supt's  Approval 
of  Advance 

EMPLOYMENT  OR  ADVANCES  MUST  BE  APPROVED  BY  SUPERINTENDENT  BEFORE  PAY-ROLL  ENTRIES  ARE  MADE 

FIG.  27. — Employment  record.     White  card,  6  inches  wide,  4  inches  high. 

the  guide  card  specifying  whether  lathe  hands,  milling-machine 
hands,  etc. 


PERSONNEL  DEPARTMENT  115 

135.  Employment  Record. — As  soon  as  an  applicant  is  em- 
ployed, it  is  desirable  to  fill  out  a  more  comprehensive  record 
than  is  contained  in  the  application  for  employment.     Fig.  27 
is  a  form  for  employment  record.     This  record,  it  will  be  noted, 
serves  also  as  a  record  of  service  and  advance  in  wages. 

136.  Record  of  Office  Employees.— A  form  for  building  up  a 
record  of  office  employees  is  shown  in  Fig.  28. 


RECORD  OF   OFFICE  EMPLOYEES, 
Dept 


Nami 


Address. 


How  to  reach  by  'phone- 
Position 


When  entered  this  com.'s  employ- 
In  what  capacity- 


Later  positions  with  this  company 

(Give  dates,  nature  of  work  and  salary  in  each  capacity) 


Amount  of  present  salary  and  date  of  present  salary  put  into  effect. 


Previous  experience  and  references. 


Approved. 


FIG.  28. — Form  for  employment  record  of  office  employees.     White  paper, 
81/2  inches  wide,  11  inches  high. 

137.  Psychologic  and  Physical  Tests,  Industrial  and  Family 
History. — The  foregoing  employment  records  include  pretty 
nearly  all  the  data  on  which  satisfactory  returns  can  be  obtained 
through  the  medium  of  reports  from  the  average  foreman  and 


116       FACTORY  ORGANIZATION  AND  ADMINISTRATION 


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122      FACTORY  ORGANIZATION  AND  ADMINISTRATION 

timekeeper.  It  is  quite  apparent  that  if  we  are  to  apply  modern 
principles  of  intelligent  selection  of  employees  and  training  them 
to  higher  efficiency,  we  must  build  up  more  comprehensive  data 
as  a  working  basis  for  the  trained  expert  in  our  labor  bureau 
who  will  keep  up  this  important  part  of  the  establishment's 
activity.  Figs.  29  to  35  inclusive  are  here  given  to  indicate 
the  comprehensiveness  of  such  records  as  are  necessary  to  afford 
a  basis  for  intelligent  selection  and  placing  of  employees  and  for 
progressive  training  to  higher  efficiency  of  apprentices  and  such 
older  employees  as  will  avail  themselves  of  such  opportunities  as 
continuation  school,  part-time  school,  or  night  school.  The 


RELEASE  CARD. 

PAY  ROLL  DEPARTMENT  MUST  BE  NOTIFIED  AS  SOON  AS  ANY  EMPLOYE  IS  LAID  OFF, 
DISCHARGED,  OR  QUITS  VOLUNTARILY. 

Date Mr. Check  No 


(  been"laid  off"    \ 
has  this  day  and  hour     1  been  discharged  > 


^   uot;/t  u  too/tu-/ j/c-tf/   r  r>   ir 

1  quit  voluntarily  ) 

Reasons  assigned 


He  has  turned  in  all  Checks,  Tools,  Wrenches,  etc.,  the  property  of  this 
Company,  and  is  entitled  to  his  wages  in  full. 

Dept.  Foreman.                                               Tool  Room  Foreman. 
Noted Superintendent. 


FIG.  36. — Release  card.     White  card,  6  inches  wide,  4  inches  high. 

forms  given  here  are  in  use  at  the  Vocational  Guidance  Bureau 
of  Cincinnati.  Schedule  I  is  the  school  record,  Schedule  II  the 
record  of  Physical  Examination,  Schedule  III  the  record  of 
Psychologic  tests  and  measurements,  Schedule  IV,  the  indi- 
vidual's industrial  history,  Schedule  V,  Economic  data  regarding 
the  individual's  home,  family  and  earnings. 

The  problem  of  satisfactory  labor  is  one  which  goes  far  beyond 
the  mere  matter  of  keeping  record  of  the  men's  previous  employ- 
ment or  their  promptness  and  regularity  of  present  service. 


PERSONNEL  DEPARTMENT 


123 


138.  Release  Cards. — When  a  man  leaves  he  should  be  given 
a  release  card  which  serves  as  a  notice  to  the  pay-roll  department. 
Fig.  36  shows  such  a  release  card,  which  must  be  signed  by  the 
tool-room  foreman  and  department  foreman,  showing  that  the 
man  leaving  has  turned  in  all  tools,  checks,  and  other  property 
of  the  company,  and  that  he  is  entitled  to  his  wages  in  full,  or 
minus  certain  deductions  for  unreturned  checks,  tools,  etc. 

It  is  desirable  to  designate  a  certain  person  as  "clearance 
interviewer"  and  obtained  a  record  of  the  reasons  given  by  all 
employees  cleared,  for  leaving.  This  clearance  interviewer  may 
be  able  to  save  a  number  of  desirable  employees.  His  reports 
should  be  summarized  and  presented  to  the  Manufacturing 
Superintendent. 

139.  Cipher  Code  of  Characteristics  of  Employees  and  Ex- 
employees. — In  order  to  keep  information  confidential,  the  fol- 
lowing cipher  code,  or  one  similar  to  it,  may  be  very  advanta- 
geous: (In  the  example  given,  the  figures  corresponding  to  the 
various    traits  have  been  purposely  disarranged  so  as  not  to 
reveal  the  cipher.) 


1.  Laid  off.  23. 

2.  Discharged.  24. 

3.  Quit.  25. 

4.  Struck.  26. 

5.  Trouble  with  foreman.  27. 

6.  Trouble    with    other    em-  28. 

ployees.  29. 

7.  Wanted  higher  wages  or  piece       30. 

rate.  31. 

8.  Wanted  shorter  hours.  32. 

9.  Objected  to  piece  work.  33. 

10.  Objected  to  premium  system.  34. 

11.  Bad  health.  35. 

12.  Too  old.  36. 

13.  Too  young.  37. 

14.  Better  job. 

15.  Did  not  report  for  work.  39. 

16.  No  work.  40. 

17.  Not  suited  to  class  of  work.  41. 

18.  Skill,  excellent.  42. 

19.  Skill,  average.  43. 

20.  Skill,  poor.  44. 

21.  Production,  fast.  45. 

22.  Production,  medium.  46. 


Production,  slow. 

Interested;  ambitious. 

Careless;  indifferent. 

Obedient;  reliable. 

Disobedient;  unreliable. 

Diligent;  energetic. 

Indolent;  wastes  time. 

Prompt;  regular. 

Not  prompt;  irregular. 

Good  disposition. 

Bad  disposition. 

Non-union  man. 

Union  man. 

Loyal;  faithful. 

Discontented;  unreasonable. 

Agitator;  trouble  maker. 

Untruthful. 

Dishonest. 

Intemperate. 

Striker. 

Talks  too  much. 

Borrows  money;  dead  beat. 

Desirable  man. 

Undesirable  man. 


124       FACTORY  ORGANIZATION  AND  ADMINISTRATION 

140.  Records  Division. — This  Division  keeps  on  file  records 
covering  all  data  which  it  is  desired  to  have  on  hand  with  regard 
to  former  and  present  employees. 

Fig.  3QA  shows  the  front  and  Fig.  3GB  the  reverse  of  a  typical 
record  form  for  employees. 


TARTED  SHOP  OH  DEPARTMENT  POSITION RATING         LEFT 


FIG.  36 A. — Record  form  for  employees.     (Front  side.) 
Yellow  cards  are  used  for  male  employees  and  white  cards  for  female 
employees. 

141.  Efficiency  Records. — Efficiency  records  may  be  made 
much  more  useful  and  specific  in  a  shop  using  piece-work,  bonus, 
or  premium  system,  than  in  a  shop  where  the  efficiency  records  are 
based  wholly  on  the  opinions  of  foremen.  A  well-conducted  shop 
will  keep  an  efficiency  record  of  employees  in  the  ranks  that  will 
enable  the  labor  superintendent  to  encourage  and  keep  the  best 
workers,  and  to  weed  out  the  bad  ones.  Many  shops  have  an 
employment  record  giving  sundry  details  as  to  a  man's  street 
address,  previous  employment,  the  size  of  his  family,  etc.,  but 


PERSONNEL  DEPARTMENT 


125 


I  have  seen  few  of  even  such  meager  records  as  are  kept  intelli- 
gently and  in  good  order,  and  which  are  ever  studied  or  frequently 
consulted.  I  have  introduced  individual  workmen's  records 
showing  each  man's  successes  and  failures  in  merit  wage  systems, 
but  I  have  found  it  difficult  to  secure  the  careful  study  of  these 


QUALIFICATIONS  AND  ABILITIES 


SPECIAL  EDUCATION 


Common  school 


High  school 


55?"  - 


YEARS  OF  SERVICE 


ORGANIZATION 


Trade-  Night  01 

Business  school 


RGE     M 

VN         M 


MAIN  OCCUPATION 


2ND    EtST  OCCUPATION 


3RD  BEST  OCCUPATION 


APPLIES  FOR 


RATING -TRADE  TE8T8 


PHYSICAL  NOTES 


BIRTHPLACE 

OF   FATHER 


3IRTHPLACE 
Or  MOTHER 


Fold  Here 


MO.       DAY       YR.     APPLICATION 


Impresses  of 
Interviewer 


FIG.  365. — Record  form  for  employees.     (Reverse  side.) 

efficiency  records  which  should  be  accorded  them  by  persons  in 
authority.  What  use  can  be  made  of  such  records?  If  we  dis- 
charge the  inefficient  workers,  what  guarantee  have  we  that  new 
men  will  be  more  efficient?  To  this  question  I  would  answer  that 
the  efficiency  records  will  reveal  to  us  which  men  need  to  be  given 


126       FACTORY  ORGANIZATION  AND  ADMINISTRATION 


a  chance  to  do  better  work,  and  they  will  show  also  which  men  in 
the  shop  are  most  capable  of  showing  them.  The  workingman 
will  take  more  kindly  to  a  demonstrator  selected  from  among  his 


Name                                                                                   Add 

ess 

Born                                                                                     Age 

Married                                                                     '                H,red 

Wages 

Served                        Years  Apprenticeship  with 

Last  Employed  bv 

Waees 

Date 
of 
Rep't 

i 

O 

1 

Charac- 
ter of 
Work 

Quan- 
tity of 
Work 

Quality 
of 

Work 

Clean- 
liness 
at 

Work 

Profi- 
ciency 
as 
Work- 
man 

IE         Punctuality 

Work- 
ing 

Prem. 
Gain 
$     C. 

Advancement 

I  ill 

w  ° 

I 

«      «     •£      »         Remarks 

FIG.  37. — Efficiency  record.     (General.)     White  card,   6  inches  wide,    4 

inches  high. 

peers  and  fellows  than  to  a  speed  boss  or  speed  expert  hired  from 
abroad.  It  is  easy  to  pick  out  in  a  machine  shop  one's  best  mill- 
ing-machine hand,  the  best  lathe  hand,  the  best  drill-press  hand, 
and  by  paying  a  higher  hourly  rate  while  on  demonstrating  work, 


WORKMAN'S  EFFICIENCY  AND  PREMIUM  RECORD 

EMPLOYE                                                                        EMPLOYE 
NAME                                                                                NUMBER                               DEPT.                                RATE 

WEEK  ENDING 

.OIAL 
ON   80. 

SUCCESS 

ss 

BONUS 

REMARKS 

TOTAL   FOR  PERIOD 

TOTAL   FOR  PERIOD 

TOTAL  FOR  PERIOD 

FIG.  38. — Record  of  efficiency  and  earnings  under  combined  premium  and 
bonus  system.     White  card,  6  inches  wide,  4  inches  high. 

to  have  them  serve  as  instructors  to  the  poorer  men.  The  great 
majority  of  men  who  have  fallen  below  a  standard  of  good  per- 
formance will  make  a  success  of  their  tasks  when  helped  in  this 


PERSONNEL  DEPARTMENT  127 

way.  Fig.  37  shows  a  form  for  efficiency  record.  An  additional 
form  is  shown  in  Fig.  38,  showing  efficiency  under  bonus  wage 
system. 

142.  Safety  Engineering  and  Compensation  Division. — This 
Division  has  supervision  over  sanitation  and  accident  prevention 
and  in  some  industries  also  over  fire  prevention  and  plant  pro- 
tection.    Activities  of  this  Division  cover  planning  of  new  safe- 
guards,   outlining    the    work    of  the  shop  safety   committees, 
investigating  proposed  shop  changes  in  co-operation  with  the 
proper  engineering  department,  investigating  safety  suggestions, 
approving  or  altering  new  shop  layouts  and  designs  for  new 
machinery  and  for  safeguards.     This  Division  looks  after  the 
preparation  of  danger  signs,  carries  on  experiments  with  new 
safeguards,    and   prepared   safety   bulletins.     It   must    keep   a 
statistical   record   of   accidents   and   file   all   accident   reports; 
classify  compensation  cases  and  keep  accounts  of  compensation 
cases.     It    must    install    and    maintain    sanitary    equipment, 
advertise  safety  work,  supervise  safety  education;  must  prepare 
disputed  cases  for  court  and  adjust  and  settle  claims.     It  must 
provide  for  the  inspection  of  plant  and  yard  from  the  safety  view 
point;  must    investigate    and  .  classify    accidents;  investigate 
complaints  and  inspect  records  of  accidents  and  settlements. 
The  technical  features  of  these  important  activities  should  be 
delegated  to  a  man  with  the  requisite  engineering  education 
to  work  out.     The  compensation  work  may  demand  the  services 
of  a  man  with  legal  training. 

143.  Educational  Division. — The  Educational  Division  should 
be  under  the  direction  of  an  experienced  educator  who  will  be 
able  to  co-ordinate  and  assist  in  planning  the  educational  activi- 
ties in  all  divisions,  whether  they  relate  to  marketing  classes 
for  experienced  salesmen,  classes  in  organization  and  manage- 
ment for  minor  executives,  training  classes  in  accountancy  or 
stenography,  classes  in  Americanization  and  citizenship,  direc- 
tion of  the  work  to  be  carried  on  in  a  training  course  for  college 
graduates,  in  the  shop  vestibule  school  or  in  tho  shop  apprentice 
school.     This  Division  will  have  to  arrange  for  advertising  the 
courses  to  be  given,  arrange  for  class  rooms,  schedule  classes, 
work  of  the  classes,  record  the  grades  and  class  standing  of 
members  of  the  various  classes  and  courses,  investigate  quality 
of  instruction,  inspect  attendance  of  classes,  determine  the  use- 
fulness and  effectiveness  of  the  classes,  and  recommend  a  reward 
for  employees  whose  work  justifies  same.     One  phase  of  the 


128      FACTORY  ORGANIZATION  AND  ADMINISTRATION 

educational  side  of  the  shop  which  requires  more  attention  than 
is  usually  given  it  is  the  apprenticeship  system.  In  most  shops 
this  is  a  farce.  Some  of  the  larger  shops,  however,  are  introduc- 
ing apprentices'  schools,  and  paying  attention  to  the  character 
of  the  boys  they  are  employing,  weeding  out  the  undesirable 
ones  and  holding  tight  to  the  good  ones. 

No  matter  how  we  may  scoff  at  paternalism  and  the  coddling  of 
the  workman,  there  is  no  denying  the  fact  that  to  make  better 
men  and  women  of  the  rank  and  file  is  a  great  fundamental  step 
in  the  direction  of  a  disposition  on  the  part  of  the  employees  to 
become  better  help.  Give  them  better 'air  and  better  surround- 
ings and  they  will  have  better  health  and  better  dispositions. 
But  we  must  do  more  than  this.  We  must  have  better  craftsmen 
with  better  technique  in  their  trades.  It  is  right  here  that  we  are 
weakest,  and  it  is  here  that  we  will  first  feel  foreign  competition. 
The  all-around  machinist  is  almost  extinct — the  man  who  knows 
how  to  get  best  results  out  of  a  lathe,  a  milling  machine,  a  planer, 
a  shaper,  a  drill  press,  and  a  boring  mill.  Machine-shop  foremen 
who  have  advanced  from  the  ranks  are.  as  a  rule  men  who 
are  proficient  on  but  one  tool,  and  are  not  competent  judges 
of  the  best  way  to  do  work  on  all  the  different  machines  even  in 
their  own  departments.  The  great  majority  of  workmen  in 
shops  to-day  have  not  had  any  schooling  beyond  the  seventh  or 
eighth  grade.  Their  shop  apprenticeship  has  not  made  them  all- 
around  craftsmen.  The  philanthropy  expended  in  the  erection 
of  manual  training  high  schools  has  failed  to  reach  the  great  mass 
of  working  people  who  have  never  got  that  far  along  in  school  life. 
It  is  this  great  majority  of  our  people  who  never  get  beyond  the 
seventh  or  eighth  grade  of  school  that  are  most  in  need  of  further 
trade  education  to  make  them  better  craftsmen.  There  is  cer- 
tainly tremendous  need  for  the  establishment  of  real  trades  schools 
with  the  best  obtainable  really  practical  instructors  for  this  great 
class  of  working  people. 

144.  Suggestion  System. — The  suggestion  system  can  ad- 
vantageously be  handled  by  the  Personnel  Dept.  A  suggestion 
system  can  be  made  of  benefit  in  any  shop,  even  a  small  one,  but 
only  if  handled  systematically  and  intelligently.  The  men  need 
to  have  the  benefits  of  the  suggestion  scheme  kept  continually 
before  them.  This  can  be  done  by  handing  out  each  month 
individual  slips  to  every  employee  announcing  the  prizes  for  the 
coming  month.  Another  means  is  the  printing  on  the  time-slips 
that  show  the  workman's  gains  or  losses  under  a  merit  wage 
system,  of  a  few  words,  calling  attention  to  the  suggestion 


PERSONNEL  DEPARTMENT  129 

scheme,  as  for  instance,  "We  are  always  glad  to  have  our  men 
make  suggestions  for  changes  in  fixtures,  appliances,  and  tools  to 
facilitate  the  work.  If  an  idea  occurs  to  you,  write  it  out  and  put 
it  in  the  suggestion  box.  Prizes  are  offered  for  the  best  sugges- 
tions." Suggestions  should  be  acknowledged  by  a  personal  letter 
to  every  one  making  a  suggestion.  Awards  must  be  intelligently 
made  by  competent  judges.  Suggestions  adopted  should  be 
put  into  effect  promptly.  Foremen  should  be  made  partici- 
pants in  the  suggestion  scheme  on  a  different  footing  from  the 
men. 

145.  Recreational  Division  Including  Social  Betterment, 
Welfare,  Athletics,  and  Cafeteria. — This  Division  will  have 
control  of  the  company  club  and  in  a  company  employing 
several  thousand  people  will  have  to  include  the  services  of  a 
cafeteria  head,  a  business  manager,  a  social  secretary  and  athletic 
director  and  a  membership  secretary.  It  is  well  to  have  the 
club's  policies  and  activities  approved  by  a  board  of  management 
composed  of  employees  known  to  have  an  interest  in  the  activi- 
ties of  the  Division.  Many  shop  superintendents  are  apt  to 
look  unfavorably  upon  so-called  betterment  or  welfare  work  as 
something  which  smacks  of  effeminacy  and  faddism.  The 
workmen  themselves  are  apt  to  regard  it  in  the  same  light; 
especially  is  this  true  if  the  persons  engaged  in  the  work  are  not 
sincere. 

From  a  shop-owner's  standpoint,  the  ideals  to  be  realized  are, 
first,  the  producing  of  a  marketable  product  which  will  command 
the  highest  price  of  any  similar  product  in  its  class;  second,  the 
producing  of  the  largest  possible  quantity  of  this  article  at  the 
lowest  possible  cost. 

With  the  development  of  a  better  educated  and  more  enlight- 
ened purchasing  class,  it  is  coming  to  pass  that  the  shop-owner 
is  beginning  to  feel  that  in  order  to  realize  the  first-named  ideal, 
the  quality  of  his  product  must  be  continually  improving.  The 
most  marketable  steam-engine  or  machine  tool  of  to-day  is  a 
product  of  much  higher  quality  than  that  which  was  the  most 
marketable  but  a  few  years  ago.  This  realization  has  resulted 
in  better  machinery,  and  in  the  employment  of  better  designing 
talent,  and  in  the  introduction  of  labor  systems  which  seek  to 
attract  and  hold  the  better  class  of  mechanics. 

The  second  business  ideal,  namely,  the  producing  of  the  largest 
possible  output  at  the  lowest  possible  cost,  involves  not  only 
good  equipment,  good  design,  and  careful  mechanics,  but  the 

9 


130       FACTORY  ORGANIZATION  AND  ADMINISTRATION 

element  of  human  activity.  The  need  for  pronounced  emphasis 
on  this  element  is  becoming  more  and  more  felt  by  manufactur- 
ers. The  standpoint  of  advantage  to  the  shop-owner  is  usually 
the  only  point  of  view  from  which  the  directors  will  consider  wel- 
fare and  betterment  propositions.  A  good  works  manager  can 
as  a  rule  find  abundant  arguments  in  favor  of  rational  welfare 
work  from  this  point  of  view. 

The  terms  "Welfare"  and  "Betterment  work"  have  been 
rather  loosely  used  to  include  practically  all  of  the  activities 
heretofore  mentioned  in  this  chapter,  such  as  proper  selection  of 
employees,  efficiency  records,  promotion  system,  apprenticeship 
system,  sanitation,  fire  prevention,  and  suggestion  system.  A 
better  designation  would  be  to  include  all  of  the  aforementioned 
activities  under  the  general  functions  of  a  labor  bureau,  as  well 
as  the  social,  athletic,  and  similar  features  which  contribute  to 
mutual  confidence.  The  popular  acceptance  of  the  terms 
" welfare"  and  "betterment"  is  to  associate  them  immediately 
with  company  contributions  of  a  philanthropic  nature  to  a  great 
annual  picnic,  Saturday  afternoon  baseball,  benefit  society  funds, 
and  similar  matters. 

In  regard  to  the  workingman's  home  life  and  his  habits,  he 
does  not  want  these  interfered  with.  However,  time  and  again, 
workingmen  have  expressed  themselves  to  me  in  regard  to  their 
wishes  for  better  home  surroundings.  They  complain  to  me  in 
the  same  way  in  various  cities,  that  civic  improvements  are  made 
in  those  parts  of  a  city  occupied  by  the  homes  of  the  well-to-do. 
There,  they  say,  they. find  paved  streets,  good  sidewalks,  shade 
trees,  water,  sewer  connections,  electric  lights,  gas,  and  street 
sprinkling,  while  the  workingmen 's  homes  are  on  muddy  streets, 
no  trees,  nor  sewers,  no  paving,  poor  sidewalks,  poor  lighting  at 
night.  Workingmen  complain  to  me  that  manufacturers  are 
willing  to  spend  time  and  money  to  influence  councils  to  secure 
switches  and  to  secure  election  to  public  office  of  men  pledged  to 
grant  their  corporation  special  privileges,  and  that  the  working- 
man  would  like  to  see  these  same  influences  at  work  to  secure 
public  betterment  of  his  home  surroundings.  This  phase  of  the 
question  is  one  that  can  hardly  be  controlled  by  the  engineer 
within  the  walls  of  the  shop,  but  it  is  well  worth  the  thought  of 
the  shop-owner. 

The  greatest  successes  in  social  betterment  work  in  connec- 
tion with  factories  have  been  accomplished  in  shops  where  work 


PERSONNEL  DEPARTMENT  131 

is  light,  such  as  the  manufacture  of  breakfast  foods,  chocolate, 
cash  registers,  bed-springs,  etc.  The  employees  in  these  shops 
are  more  easily  reached  than  are  the  workers  in  the  foundry,  the 
forge  shop,  and  the  heavy  machine  shop.  I  have  attended  enter- 
tainments of  a  high  order,  given  without  charge  by  the  owners 
of  one  of  the  largest  shops  in  Chicago,  and  under  the  auspices  of 
skilled  social  settlement  workers.  Yet  they  failed  to  reach  the 
men.  I  have  in  mind  particularly  one  evening  when  the  enter- 
tainment was  a  lecture  on  the  Klondike,  preceded  and  followed 
by  music  by  the  shop  band.  With  many  thousands  to  draw  from, 
there  was  but  a  half  dozen  men  outside  of  the  band  present.  The 
lecture  was  intensely  interesting  to  me;  yet  one  after  another 
the  men  went  to  sleep.  There  were  two  reasons  for  this:  first, 
the  men  were  physically  exhausted;  second,  it  was  not  the  type 
of  entertainment  that  appealed.  When  the  orchestra  struck  up 
it  was  with  vigor  and  abandon,  and  the  men  came  to  " attention" 
at  once.  This  same  large  shop,  assisted  by  private  donations 
from  large  stockholders,  instituted  much  betterment  work,  includ- 
ing a  manual  training  school  for  the  children  of  the  employees. 
A  minor  feature  that  was  a  good  one  was  the  distribution,  on  a 
truck,  of  bottles  of  pure  sterilized  milk  sold  at  cost.  But  the 
greatest  difficulty  encountered  here,  as  in  the  heavy  steel  indus- 
tries about  Pittsburg,  is  the  handling  of  the  adult  workman 
engaged  in  heavy  labor.  The  Pittsburg  district  abounds  with 
magnificent  club  buildings,  provided  with  libraries,  gymnasiums, 
social  features,  etc.,  open  to  the  laborer  who  wishes  to  avail  him- 
self of  their  opportunities,  and  yet  these  institutions  fail  to  reach 
those  who  most  need  uplifting.  These  clubs  are  taken  advan- 
tage of  by  the  young  college-educated  apprentices,  shop  clerks, 
and  some  few  of  the  young  men  of  the  higher  grade  mechanic 
class.  There  is  great  need  of  successful  plans  for  reaching  the 
heavy  labor  class,  plans  which  will  result  in  continuous  and  per- 
manent good. 

146.  Medical  Division/ — This  Division  should  be  under  the 
direction  of  a  competent  physician  assisted  by  capable  trained 
nurses.     Its  work  will  include  the  administration  of  first  aid, 
giving  of  medical  and  hygienic  advice,  the  conduct  of  physical 
examinations,  the  proper  execution  of  major  operations  where 
such  are  necessary,  making  of  home  visits;  also  the  development 
of  such  contacts  as  may  be  desirable  by  way  of  shop  matrons. 

147.  Labor  Turnover. — The  labor  turnover  is  a  ratio  in  regard 
to  which  there  is  some  difference  of  opinion.     Some  employers 
define  it  as  the  ratio  of  the  number  hired  in  a  given  period  of  time 


132       FACTORY  ORGANIZATION  AND  ADMINISTRATION 

to  the  average  number  on  the  payroll  during  the  same  period  of 
time.  Others  express  it  as  the  ratio  of  the  number  leaving  in  a 
given  period  of  time  to  the  average  number  on  the  payroll  during 
the  same  period  of  time. 

It  will  be  noticed  that  the  value  of  the  ratio  and  its  reliability 
will  vary,  depending  on  whether  a  company  is  working  under  an 
increasing  or  diminishing  labor  program.  Hence,  some  com- 
panies use  both  ratios  in  their  statistical  reports.  The  majority, 
however,  use  the  ratio  of  the  number  leaving  to  the  average 
number  employed,  which  would  be  a  perfectly  rational  basis 
under  normal  labor  conditions. 

The  total  turnover  data  are  preferably  broken  down  by  de- 
partments and  shops  within  the  departments.  An  example  of  a 
turnover  report  broken  down  by  shops  is  shown  in  Fig.  38A. 


DMA 
DM2B 
DM3B 
DM0 
HM1D 
DM2D 
DAI3D 
DM1E 
DM2E 
DMF 
DMG 
DM4K 
DM5K 
DM1P 
DM2P 
DMS 
DMT 
DMW 
ADH 
ADV 
ADZ 



—  ^— 



, 

FIG.  38A. — Turnover  report  broken  down  into  turnover  for  each  shop  in 

a  department. 

148.  Shop  Rules. — Another  matter  frequently  overlooked  is 
the  providing  of  each  employee  with  a  full  set  of  shop  rules  and 
regulations.  The  posting  of  such  notices  at  different  places 
through  the  works  is  not  a  satisfactory  plan.  Every  new  em- 
ployee should  be  given  a  booklet  on  which  is  written  his  name 
and  his  check  number,  so  that  he  will  consider  it  his  individual 
property  and  not  throw  it  away.  In  the  booklet  are  listed  con- 
cisely all  of  the  shop  rules  and  regulations.  As  an  example 
of  what  such  rules  and  regulations  may  be,  the  following  is  quoted ; 


PERSONNEL  DEPARTMENT  133 

1.  On  entering  our  employ  the  time-keeper  will  provide  you  with  a 
check  number.     Do  not  fail  to  notify  the  time-keeper  of  any  change  in 
your  address.     The  tool-room  attendant  will  provide  you  with  tool 
checks  which  must  be  returned  to  him  when  you  leave.     In  order  to 
place  the  responsibility  for  breakage  and  loss  of  small  tools,  the  tool- 
room will  issue  no  files  or  hack-saw  blades,  unless  regular  order  slip  is 
presented,  signed  by  foreman,  and  bearing  check  number  of  man. 
Checks  will  not  be  returned  on  broken  taps,  drills,  or  end  mills,  unless  an 
order  bearing  man's  check  number  and  signed  by  the  foreman  is  returned 
with  the  broken  tool.     A  record  of  each  man's  breakage  will  be  kept  in 
tool-room,  and  men  will  be  held  responsible  for  an  unreasonable  amount 
of  breakage. 

2.  Each  employee  must  personally  register  at  the  time-clock  at  the 
time  he  commences  and  ceases  work.    As  the  pay-roll  is  figured  accord- 
ing to  registration  on  time-recorder,  you  will  appreciate  the  importance 
of  registering  correctly.     Employees  ringing  in  late  will  be  paid  from 
the  nearest  quarter  hour  following  time  rung  in,  and  must  begin  work  at 
once  on  entering  shop.    All  employees  will  ring  clock  four  times  daily, 
whether  going  home  at  noon  or  not.    A  record  of  punctuality  is  kept  for 
use  in  connection  with  record  of  general  proficiency  in  establishing  em- 
ployees' standing. 

NOTE. — Insobriety  will  not  be  tolerated.  Employees  must  give 
reason  for  absence,  and  should  see  that  their  foreman  is  notified  by 
phone  or  otherwise  in  case  of  sickness,  so  that  work  can  be  arranged  for. 

3.  You  are  engaged  at  so  much  per  hour,  and  will  be  paid  by  the  hour. 
Time  over  sixty  hours  per  week  is  paid  for  at  the  rate  of  time  and  one- 
quarter  for  the  additional  time  over  sixty  hours. 

4.  Whistle  will  blow  in  the  morning  and  after  the  noon  recess  two 
minutes  before  time  to  begin  work,  so  that  all  may  have  a  chance  to 
reach  their  place  before  starting  whistle,  when  every  one  is  expected 
to  be  at  his  post  ready  for  work.    Just  entering  the  building  at  starting 
time  will  not  be  satisfactory. 

5.  You  must  use  the  employees'  entrance  only,  at  front  of  building,  in 
entering  and  leaving  premises. 

6.  Any  one  wishing  permission  to  leave  during  working  hours  must  get 
permission  from  his  foreman,  and  ring  out  on  time-clock. 

7.  In  case  you  expect  to  be  absent  a  number  of  days,  or  wish  to  leave 
the  company's  employ,  you  must  obtain  regular  release  card  from  your 
foreman  before  you  can  receive  your  pay  from  cashier. 

8.  Every  one  must  keep  his  machine  tool  or  working  place  as  clean 
as  possible.    Paper,  rags,  scraps  of  food,  and  tobacco-spit  must  be  kept 
from  shop  and  wash-room  floors.    Good  air  is  required  fo^  good  health 
and  good  work.     It  is  the  duty  of  men  and  foremen  to  see  that  the  shop 
is  kept  clean,  properly  ventilated,  and  to  do  everything  else  to  keep  the 
sanitary  conditions  in  good  order. 


134       FACTORY  ORGANIZATION  AND  ADMINISTRATION 

9.  Receiving  visitors,  lunching  or  eating,  or  reading  cannot  be  per- 
mitted during  working  hours.     Smoking  and  "lighting"  of  pipes,  cigars, 
etc.,  is  absolutely  prohibited  at  any  time.     This  rule  is  imperative,  owing 
to  the  inflammable  and  explosive  nature  of  materials  used,  and  it  will 
be  necessary  to  dismiss  any  employee  disobeying  same. 

10.  It  is  absolutely  necessary  to  have  all  time  on  work  going  through 
shop  reported  correctly.    You  are  therefore  requested  to  see  that  each 
job  you  take  hold  of  has  a  shop-order  tag  with  it,  and  also  see  that  the 
shop-order  tag  leaves  your  place  with  the  work.     Where  stock  is  drawn 
from  wareroom  for  first  operation,  foreman  sends  tag  to  wareroom  for 
material,  the  man  in  there  attaches  the  tag  to  the  stock  and  retains 
warehouse  coupon.     Workmen  must  not  work  on  stock  of  any  kind 
unless  shop-order  tag  accompanies  stock.     Workmen  should  count  the 
number  of  pieces  in  each  lot  before  commencing  work,  and,  if  full  quan- 
tity called  for  is  not  there,  report  to  foreman  immediately  before  begin- 
ning on  the  job.     No  alterations  of  any  kind  are  to  be  made  on  the 
face  of  tag  excepting  by  production  department.     Necessary  changes 
in  quantity  are  to  be  made  by  production  department  only.    In  such 
cases  new  tag  must  invariably  be  issued. 

11.  In  all  cases  where  men  are  to  make  more  than  one  piece  of  a 
kind,  foreman  must  be  called  to  inspect  first  piece  and  pass  on  it  before 
any  others  are  made.     Defective  or  spoiled  pieces  must  be  immediately 
sent  to  finished  storeroom  by  foreman. 

12.  All  parts  must  be  made  according. to  blue-prints,  which  are  obtain- 
able at  tool-room.     No  deviation  from  blue-prints  is  allowable.     This 
applies  to  special  as  well  as  regular  work.     Blue-prints  must  not  be 
borrowed  under  any  conditions.     If  a  blue-print  is  out  when  called  for, 
it  is  the  duty  of  the  tool-room  to  hunt  it  up. 

13.  Should  any  work  be  spoiled  or  any  castings  prove  defective,  such 
pieces  must  be  shown  immediately  to  foreman,  who  will  see  that  they 
are  sent  to  finished  storeroom,  and  that  any  necessary  changes  in  tags 
are  made  by  production  department. 

14.  An  order  signed  by  department  foreman  must  be  presented  for 
any  material  wanted  from  storerooms.    All  slips  must  give  an  order 
number  of  either  general  or  standing  order  series.     Use  a  separate  slip 
for  each  separate  order  number.    Positively  no  material  will  be  issued 
except  in  exchange  for  the  order  properly  filled.     No  one  except  store- 
keepers   allowed    to    handle    material.     These   instructions    must    be 
enforced  by  storekeepers. 

15.  In  all  matters  pertaining  to  orders,  reports,  or  any  company  busi- 
ness, men  will  consult  with  and  receive  orders  from  foremen  of  their  own 
departments  only,  and  foremen  from  superintendent.     Orders  from  office 
will  be  given  to  superintendent  and  by  him  to  foremen. 

16.  You  are  expected  to  be  governed  by  the  above  rules,  and  your 
compliance  with  same  affects  your  standing  and  the  permanency  of 
your  employment. 


PERSONNEL  DEPARTMENT  135 

REFERENCES 

TAYLOR:  "Shop  Management,"  Paragraphs  221-234. 

HARTNESS:  "The  Human  Factor  in  Works  Management." 

REDFIELD:  "The  New  Industrial  Day."     Chapters  VII-IX. 

MUNSTERBERG:  "Psychology  and  Industrial  Efficiency,"  Parts  I  and  II. 

GILBRETH:  "Primer  of  Scientific  Management,"  Chapter  IV  and  V. 

SCOTT:  "Increasing  Human  Efficiency  in  Business." 

RUGER:  "The  Psychology  of  Efficiency." 

GODDARD:  "The  Binet-Simon  Measuring  Scale  for  Intelligence." 

LODGE:  "Rules  of  Management." 

KELLY:  "Hiring  The  Worker." 

SLIGHTER:  "The  Turnover  Of  Factory  Labor." 

BLOOMFIELD:  "Labor  And  Compensation." 

U.  S.  ARMY,  ADJUTANT  GENERAL'S  DEPARTMENT:  "Trade  Specifications 
and  Occupational  Index  of  Professions  and  Trades  in  U.  S.  Army."  Pre- 
pared by  Col.  John  J.  Swan,  Government  Printing  Office,  1918. 

U.  S.  DEPARTMENT  OF  LABOR:  'Description  of  Occupations."  Govern- 
ment Printing  Office,  1918.  Boots  and  Shoes,  Harness  and  Saddlery,  Can 
Sugar  Refining,  Flour  Mills,  Electrical  Manufacturing,  Distribution  and 
Maintenance,  Logging  Camps  and  Saw  Mills,  Medicinal  Manufacturing, 
Metal  Working,  Building  and  General  Construction,  Railroad  Transporta- 
tion, Shipbuilding,  Mines,  and  Mining,  Office  Employees,  Slaughtering 
and  Meat  Packing,  Street  Railways,  Textiles  and  Clothing,  Water  Trans- 
portation. 


CHAPTER  X 
OFFICE  MANAGEMENT 

149.  Functions  of  the  Office  Manager. — The  Office  Manager 
or    Office    Superintendent    of    a    manufacturing    establishment 
usually  has  charge  of  the  mail  distribution  and  collection,  central 
filing  of  all  mail  to  and  from  parties  outside  the  establishment, 
internal  mail  service,  telephone  system,  telegrams,  central  typing, 
multigraphing  and  mimeographing,  and  supervision  so  far  as 
regards  discipline,  promotion  and  transfer,  over  all  office  help. 
It  is  his  duty  to  see  that  standard  methods  are  employed  in  all 
offices.     This  is  best  secured  by  designating  some  one  individual 
as  the  chief  clerk  in  each  office  or  department  and  having  this 
chief  clerk  responsible  to  the  Office  Manager  in  all  matters  relat- 
ing to  the  foregoing  list  of  subjects 

150.  Handling  Mail. — The  delegation  of  the  duty  of  opening 
the  mail  depends  very  largely  on  the  nature  of  the  business.     It 

is  always   desirable  to  have 
DECEIVED all  maii  Opene(i  by  one  man, 

BY if   the    mail    feature    of   the 

business  is  not  too  heavy  to 
permit  of  this  arrangement. 

FIG.  39.-Time-stamp  showing  date    jn   many  establishments  the 
and  hour  of  opening  mail,  by  whom  it  M  .  ,     . ,  *         i        ,-, 

,  ..'.  J  ,  mail  is  opened  either  by  the 

is  opened  and  to  whom  it  is  referred. 

secretary  of  the  company  or 

by  the  chief  correspondent,  the  latter  being  usually  the  man  in 
direct  charge  of  the  general  office. 

It  is  sometimes  desirable  to  use  a  time-stamp  to  designate 
the  hour  and  date  of  opening  the  mail,  such  stamp  bearing  a  space 
for  the  entering  of  the  name  of  the  person  or  department  to  which 
the  letter  or  document  is  referred.  Fig.  39  shows  such  a  stamp. 
An  additional  stamp,  showing  ANSWERED 
the  hour  and  date  and  name 

of  person  answering  the  letter,      BY 

is  often  used,  as  shown  in  Fig.        FlG-  40.— Time-stamp  showing  date 
4Q  and  hour  of  answering  letter  and  by 

,        ,          . ,        whom  it  is  answered. 
If  the  man  who  does  the 

stamping  of  the  time  of  receipt  and  the  distributing  of  the  in- 
coming correspondence  is  the  only  one  provided  with  a  time- 

136 


OFFICE  MANAGEMENT  137 

stamp,  his  time-stamp  should  not  be  taken  as  evidence  of  laxity 
of  attention  on  the  part  of  others,  since  the  letter  or  document 
may  have  been  delayed  in  the  original  party's  charge  after  having 
been  stamped.  The  question  should  be  very  carefully  weighed  as 
to  whether  the  advantages  gained  by  the  use  of  a  time-stamp  are 
sufficient  to  overcome  the  disadvantages  incidental  to  possible 
internal  frictions.  Certainly  every  one  likely  to  be  held  to  ac- 
count for  delays  in  the  handling  of  documents  should  be  pro- 
vided with  a  time-stamp  if  the  system  is  to  be  a  fair  one. 

151.  Messenger  Service. — A  messenger  service  at  fixed  hours 
will  do  much  toward  promoting  promptness  in  all  departments. 
Where  such  a  system  is  in  use,  the  head  of  each  department  is 
provided  with  a  three-decked  basket,  one  deck  being  marked  "In," 
one  "Out,"  and  one  "File."     The  messenger  leaves  the  incoming 
mail  in  the  basket  or  deck  marked  "In,"  and  removes  the  con- 
tents of  those  marked  "Out"  and  "File."     Such  a  system  must  be 
made  prompt  and  accurate.     Under  these  conditions  it  is  possible 
to  request  heads  of  departments  to  resort  to  a  minimum  of  calling 
on  each  other,  and  to  avoid  the  carrying  in  person  of  papers  from 
department  to  department. 

152.  Filing  System. — All  correspondence  with  people  outside 
the  office  should  be  filed  under  the  direction  of  one  chief  filing 
clerk.     This  filing  place  should  be  centrally  located  so  as  to  be 
easily  accessible  to  all  departments,  especially  to  those  who  need 
to  consult  the  files  most  frequently,  such  as  the  sales  or  purchasing 
departments.     The  various  departments  will  soon  adapt  them- 
selves to  this  system  of  a  central  file,  and  will  find  that  condensed 
reference  records  are  more  convenient  than  a  continual  handling 
of  original  letters  and  documents. 

At  first  sight  it  might  seem  somewhat  useless  to  burden  the 
general  file  with  inter-departmental  correspondence,  but  on 
further  reflection  it  will  appear  that  it  is  very  desirable  that  the 
general  manager  see  regularly  or  occasionally  copies  of  all  such 
correspondence,  before  it  is  filed,  in  order  that  he  may  suggest, 
where  necessary,  the  avoidance  of  too  much  correspondence  and 
internal  disputes. 

In  the  matter  of  filing  locally  at  the  various  departments 
internal  correspondence,  it  will  generally  be  found  that  provi- 
sions should  be  made  for  each  head  of  department  to  file  his  inter- 
departmental letters  and  instructions,  an  additional  carbon  copy 
of  all  internal  letters  and  instructions  being  made  so  that  one 
can  be  kept  at  the  department  and  one  sent  in  for  the  general 
manager's  scrutiny  and  the  general  file. 


138       FACTORY  ORGANIZATION  AND  ADMINISTRATION 


The  numerical  filing  system  is  the  most  satisfactory  in  an 
establishment  having  a  central  filing  department  because  it  facil- 
itates the  file  clerk's  recording  the  withdrawal  of  the  correspond- 
ence between  any  firm  or  individual  byv  merely  entering  against 
the  party  withdrawing  the  correspondence  the  number  of  the 
file  holder  and  the  date. 

Fig.  41  shows  the  file  clerk's  numerically  arranged  card 
record.  This  card  record  gives  the  name  of  the  firm  or  individual, 
whose  correspondence  is  in  the  folder  of  a  certain  number,  to- 
gether with  the  exact  address  of  the  party  or  firm  and  the  dates  of 
all  correspondence,  as  well  as  date  and  number  of  transfer  when 
the  folder  becomes  too  bulky  or  is  so  obsolete  that  it  should  be 
transferred  to  a  storage  file. 

The  alphabetically  arranged  cross-index  or  finding  card  is 
shown  in  Fig.  42.  This  enables  one  to  find  the  number  of  the 


NAME                                                                     FILEN°- 
ADDRESS 

DATES  OF 
LETTERS 

DATES  OF 
REPLIES 

DATES  OF 
LETTERS 

DATES  OF 
REPLIES 

DATES  OF 
LETTERS 

DATES  OF 
REPLIES 

DATE  AND  NO. 
OFTRANSFER 

FIG.  41. — Numerically  arranged  card  record  showing  contents  which 
should  be  in  folder  of  a  given  number,  together  with  dates  of  transfer  to 
storage.  White  card,  6  inches  wide,  4  inches  high. 

folder  in  which  the  correspondence  with  any  individual  or  firm 
is  filed.  Fig.  43  shows  the  little  slip  which  the  file  clerk  writes 
when  he  hands  out  any  file  folder.  When  the  folder  is  returned, 
he  may  either  destroy  the  slip  or  hand  it  to  the  party  who  made 
the  withdrawal  as  a  receipt  for  the  return  of  the  folder.  The 
folders  are  most  generally  kept  in  "  vertical"  filing  cases,  and  their 
contents  are  retired  to  transfer  storage  cases  according  to  some 
definite  rule.  For  instance,  it  may  be  decided  that  at  the  begin- 
ning of  each  month  the  correspondence  of  the  corresponding 
month  of  the  previous  year  shall  be  retired  from  the  current  file. 
As  correspondence  is  apt  to  fall  out  of  folders  that  are  carried 
about  a  good  deal,  it  may  be  found  desirable  to  use  stout  roomy 
envelopes  instead  of  the  open  folders.  In  order  to  keep  down  the 


OFFICE  MANAGEMENT 


139 


expense  of  preparing  a  folder  and  indexing  letters  from  transient 
correspondents  the  alphabetical  system  of  filing  may  be  applied 
to  all  new  names  until  at  least  three  or  more  letters  and  replies 
have  been  received. 

In  order  to  prevent  correspondence  becoming  disarranged  the 


SN-SY 

NAME 

DATE  OF 
LETTER 

SUBJECT 

DISPOSITION 

FILE  NO. 

FIG.  42. — Alphabetically  arranged  cross-index  or  finding  card  for  finding 
the  number  of  the  folder  in  which  correspondence  is  located.  White  card, 
6  inches  wide,  4  inches  high. 

folder  may  be  punched,  and  the  letters  also  punched  and  fas- 
tened to  the  folder  by  McGill  fasteners.  The  letter  bearing 
latest  date  should  always  be  filed  on  top.  Different  departments 
or  bureaus  may  advantageously  be  provided  with  file  folders 
of  different  distinctive  colors. 
Carbon  copies  of  letters  for 
filing  purposes  should  be 
written  on  buff,  lemon  or 
canary-colored  paper,  instead 
of  on  the  thin  white  sheets 
usually  used  for  this  purpose. 
The  yellow  color  immediately 
calls  attention  to  the  fact 
that  it  is  a  copy  of  an  out- 


FILE  FOLDER  NO.. 
DELIVERED  TO _ 
DATE 


FIG.  43. — File  clerk's  record  of  with- 
drawal of  folders  by  various  depart- 
ments or  individuals.  When  folder  is 
going  letter.  The  thin  sheets  returned  this  slip  may  be  handed  out 
of  poor  quality  usually  used  as  a  receipt.  White  paper,  5  inches 
have  the  disadvantage  of  not  wide>  3  inches  hish- 
standing  alone,  of  folding, 

wrinkling  or  tearing  easily,  and  not  being  as  easily  recognized 
as  copies  of  outgoing  correspondence  as  those  on  yellow  paper. 
In  certain  lines  of  business  it  is  important  to  have  a  copy  of 
the  signature  of  the  person  signing  letters.  Where  such  is  the 
case  the  roller  press  copy  will  be  preferable  to  carbons.  As  an 


140       FACTORY  ORGANIZATION  AND  ADMINISTRATION 

additional  precaution,  the  press  copy  bound  book  may  be  used 
for  a  second  copy  besides  the  roller  copy. 

153.  Relative  Location  of  Offices. — Where  a  local  telephone 
exchange  is  in  use,  the  telephone  operator  can  be  placed  so  as  to 
receive  all  persons  making  calls.     One  of  the  most  serious  defects 
where  this  system  is  in  force  is  the  failure  to  provide  suitable 
waiting  or  reception  rooms  for  callers.     In  many  cases  well-to- 
do  establishments  provide  a  single  bench  in  a  very  small  place, 
making  it  necessary  for  all  sorts  and  conditions  of  callers  to  be 
crowded  into  cramped  quarters.     A  separate  calling  place  should 
be  provided  for  all  applicants  for  factory  employment,  and  such 
applicants  should  be  promptly  directed  to  that  place  by  the 
telephone  operator  or  reception  clerk.     For  other  callers  a  neat 
room  provided  with  the  company's  publicity  matter  does  much 
to  secure  their  good-will. 

It  is  apparent  that  the  general  office,  and  especially  the  filing 
department,  must  be  centrally  located.  Those  department 
offices  should  be  located  nearest  the  reception  room,  whose  man- 
agers are  most  likely  to  receive  a  considerable  number  of  business 
callers.  Such  offices  would  be  those  of  the  purchasing  agent, 
the  sales  manager,  and  the  cashier.  The  designing  of  a  set  of 
offices  or  of  an  administration  building  deserves  careful  attention, 
and  a  good  plan  to  pursue  in  planning  new  offices  is  to  cutout 
templets  representing  each  desk  and  piece  of  furniture  and  to 
place  these  into  trial  positions,  and  then  to  cut  out  templets 
representing  the  various  offices,  placing  those  offices  together 
which  are  likely  to  have  the.  greatest  inter-communication. 
Partitions  between  offices  should  be  low  for  the  sake  of  good 
ventilation,  with  cathedral  glass  or  similar  translucent  glass  in 
the  upper  portion,  and  with  the  name  of  the  department  plainly 
lettered  on  the  door.  It  is  preferable  to  erect  partitions  in  sec- 
tions so  that  they  may  be  easily  removable. 

154.  Desks. — Some  executives  prefer  to  use  flat-top  desks 
so  that  all  papers  are  certain  to  be  put  into  their  proper  files, 
rather  than  getting  into  pigeon-holes.     The  putting  of  flat-top 
desks  in  a  position  where  the  occupants  must  face  each  other, 
or  the  using  of  double  flat-top  desks,  is  apt  to  be  annoying  to 
the  persons  occupying  them,  as  privacy  and  concentrated  thought 
are  interfered  with  by  having  to  look  constantly  at  another  per- 
son, and  perhaps  being  drawn  into  conversation  that  would  best 
be  omitted. 


OFFICE  MANAGEMENT  141 

However,  it  must  be  borne  in  mind  that  wall  space  can  be  as 
a  rule  better  utilized  as  a  back  to  filing  devices  than  as  a  back 
to  desks,  and  with  some  ingenuity  desks  can  be  placed  in  such 
positions  that  they  are  not  against  walls,  and  also  so  that  the 
occupants  of  desks  are  not  facing  one  another. 

Of  recent  years  types  of  desks  have  come  into  use  in  which 
the  old-style  storage  drawers  have  been  replaced  by  vertical 
files  and  card-index  drawers  All  drawers  containing  company 
business  should  be  accessible  at  all  times  to  department  heads. 
Personal  storage  drawers  should  be  so  marked  on  the  outside, 
and  to  these  drawers  the  desk  occupant  may  be  given  a  private 
key.  It  is  desirable  to  keep  the  private  offices  of  the  more  im- 
portant officials  and  department  heads  free  from  files,  the  secretary 
or  stenographer  bringing  in  and  removing  all  papers  required. 
The  table  on  which  such  papers  are  put  during  discussion  or 
dictation  should  be  separate  from  the  official's  desk. 

The  sales  department  is  not  here  considered  a  part  of  the 
general  office.  Hence  no  mention  is  made  here  of  follow-up 
and  other  systems  in  connection  with  sales,  since  we  are  con- 
fining ourselves  to  the  functions  of  the  general  office  in  so  far  as 
they  affect  the  factory  administration. 

REFERENCES 

CAHILL  AND  RUGGERI:  "Office  Practice." 

PARRY:  "Office  Management." 

DICKSEE  AND  SLAIN:  "Office  Organization  and  Management." 

SCHULZE:  "The  Modern  Office." 

HUDDERSLY:  "Indexing  and  Filing." 


CHAPTER  XI 
THE  ORDER  DEPARTMENT 

155.  Functions  of  Order  Department. — The  order  is  the  start- 
ing point  of  activity  in  the  factory.  It  is  the  basic  authority 
upon  which  is  built  the  entire  structure  of  cost  statistics.  There 
must  be  a  regular  routine  for  the  proper  authorization,  classifi- 
cation, and  record  of  all  orders  issued,  and  for  the  dissection  of 
such  general  orders  as  require  it  into  the  sub-orders  or  individual 
operation  instructions  which  form  an  essential  part  of  an  accurate 
factory  system.  This  dissection  into  elemental  steps  is,  however, 
beyond  the  immediate  control  of  the  order  department,  and  is  a 
function  of  the  production  department,  whose  duties  are  distinct 
from  and  additional  to  those  of  an  order  clerk  or  order  depart- 
ment. The  order  department's  sphere  is  limited  to  the  issuing 
of  general  orders,  and  turning  them  over  to  such  departments  as 
must  execute  the  work,  such  as  the  production  department,  the 
shipping  department,  etc.  It  is  the  duty  of  the  order  depart- 
ment to  properly  classify  all  orders,  and  to  determine  from  time  to 
time  the  progress  of  orders  issued.  This  last  process  may  in  some 
cases  be  well  delegated  to  a  distinct  department  known  as  the 
order  tracing  department,  whose  duty  it  will  be  to  consult  with  the 
production  department  and  such  other  departments  as  may  be 
necessary,  and  collect  such  data  as  are  necessary  to  a  definite 
periodical  report  of  the  condition  of  every  order  in  the  factory. 
In  some  cases  the  order  clerk  may  act  as  tracer  himself  so  far  as 
customers7  orders  are  concerned,  provided  this  does  not  interfere 
with  his  accounting  or  statistical  duties,  or  the  function  may  be 
assigned  to  some  particular  individual.  This  man's  duties  are 
distinct  from  those  of  the  production  department's  tracer, 
whose  duty  it  is  to  follow  up  the  progress  of  individual  parts. 
For  instance,  in  an  automobile  factory  the  order  department's 
tracer  would  follow  up  John  Smith's  order  for  a  car  having  a 
special  reduction  gear,  special  springs,  special  battery  box,  and 
special  body,  while  it  would  be  the  particular  function  of  the  pro- 
duction department's  tracer  to  determine  what  parts  need  over- 

142 


THE  ORDER  DEPARTMENT  143 

time  work  to  get  out  the  transmissions  on  time  for  Shop  Order  D. 
5100  calling  for  twenty-five  cars. 

Naturally  the  owners  of  the  business  or  their  most  direct  repre- 
sentatives will  be  the  initiating  authority  in  the  issuing  of  general 
orders,  based  either  on  customers'  orders  or  on  the  providing  of 
a  stock  on  hand  of  the  manufactured  product.  The  filing  of  all 
orders  received,  and  their  proper  classification,  is  a  function  by 
itself,  to  be  assigned  to  an  order  clerk  or  order  department.  The 
departmental  laying  out  of  the  working  system  of  a  factory  must 
not  be  construed  as  meaning  a  distinct  office,  or  many  clerks  as 
belonging  to  what  is  called  a  "  department."  A  department  may 
consist  of  but  one  man,  or  one  man  may  carry  several  depart- 
ments. In  small  establishments  it  is  just  as  important  as  in  large 
ones  that  the  distinct  departmental  duties  of  every  man  be  defi- 
nitely laid  down.  The  place  and  relations  of  the  man  and  the 
department  in  the  staff  organization,  and  of  the  records,  statistics, 
and  accounts,  must  be  made  perfectly  clear,  preferably  in  a 
graphically  charted  manner,  as  referred  to  elsewhere  in  this 
work. 

The  order  department  will  necessarily  have  more  work  in  an 
establishment  receiving  numerous  small  orders  for  a  variety  of 
product  than  in  one  making  a  limited  range  of  a  standard  product 
sold  in  quantity. 

156.  Classification  of  Orders. — It  is  sometimes  found  advan- 
tageous for  the  clerk  or  department  receiving  and  recording  cus- 

'  tomers'  orders  to  have  a  strictly  consecutive  record  of  all  cus- 
tomers' orders  arranged  in  order  of  seniority,  irrespective  of 
classification,  according  to  what  the  orders  call  for,  giving  the 
orders  a  record  number  in  addition  to  any  class  letters  or  numbers 
which  may  be  assigned  them  subsequently  by  the  production 
department. 

The  most  satisfactory  arrangement  of  orders  is  one  in  which 
all  work  of  the  same  general  class  is  put  together  into  a  series  by 
itself. 

The  orders  belonging  to  each  series  are  best  written  on  cards 
or  loose  leaves  to  be  filed  in  some  modern  binding  device,  per- 
mitting of  the  easy  insertion  or  taking  out  of  any  leaf,  and  pro- 
vided with  a  lock  so  that  only  authorized  persons  may  make  such 
removals  or  insertions. 

157.  Manifold    Copies    of    Orders.— The    book   typewriter, 
also  known  as  the  billing  machine  or  flat-bed  machine,  is  almost 


144     FACTORY  ORGANIZATION  AND  ADMINISTRATION 

indispensable  in  the  rapid  duplication  of  cards  or  loose  leaves 
involving  tabulation,  with  as  many  carbon  copies  as  may  be 
needed.  It  will  be  necessary  that  a  set  of  copies  of  orders  be 
provided  the  production  department.  A  set  of  copies  may  also 
be  required  respectively  by  the  superintendent  and  the  works 
manager  or  such  corporation  officer  as  devotes  his  particular 
attention  to  the  internal  working  of  the  factory. 

The  cards  or  sheets  representing  live  or  uncompleted  orders 
are  of  course  kept  in  a  group  by  themselves,  distinct  from  the 
files  of  dead  or  completed  orders. 

It  is  advisable  to  have  each  distinct  order  series  printed  on 
paper  of  a  distinct  color.  The  order  department  will  index  by 
customers7  names,  and,  if  desirable,  by  styles  and  sizes  of  product, 
the  orders  in  each  series. 

158.  Example  of  Order  Series. — As  an  illustration  of  the 
grouping  into  series,  "A"  orders  will  call  for  complete  product 
items  which  have  to  be  built  to  order;  "B"  orders  for  repair 
parts  which  have  to  be  built,  and  "C"  orders  for  any  apparatus 
which  can  be  shipped  immediately  out  of  stock.  These  three 
classes  of  orders  will  generally  be  all  that  are  needed  to  classify 
customers'  or  agents'  orders.  The  issuing,  filing,  and  tracing  of 
these  classes  come  properly  under  the  head  of  an  order  depart- 
ment, which  should  be  distinct  from  the  factory  production 
department.  This  order  department  issues  all  of  its  orders  or 
instructions  to  the  production  or  planning  department.  The 
latter  department  must  be  the  point  of  centralization,  or  clearing- 
house of  all  orders  to  do  work  in  the  factory  proper. 

As  an  example  of  the  form  of  orders  issued  by  an  order  depart- 
ment, the  following  examples  are  given,  representing  a  combined 
invoice  and  shipping  order  with  manifolds  serving  various  pur- 
poses, as  used  by  a  company  manufacturing  electrical  dynamos 
and  motors.  The  set  of  forms  shown  are  used  only  for  complete 
machines,  a  separate  series  being  used  for  supply  or  repair  orders. 
One  distinct  order  is  used  for  each  distinct  machine.  In  this 
way  invoices  are  promptly  mailed  for  partial  shipments  where  a 
customer  orders  more  than  one  machine.  Fig.  44  shows  the  form 
which  serves  for  original  order,  and  also  for  invoice  by  the  billing 
department.  There  are  two  additional  forms  identical  with  this 
original,  excepting  that  they  bear  in  the  upper  right-hand  corner 
in  heavy  type  the  notations,  respectively,  " Duplicate  Invoice," 
and  "For  Shipping  Department  Duplicate  File." 


THE  ORDER  DEPARTMENT 


145 


ORIGINAL. 

INVOICE  NO. 

SOLD  TO 
ADDRESS 

DATED 
DELIVERY,  F.O.B. 

ORDER  RECD. 

WANTED 

SHIPPED  TO 

TERMS                              DAYS  NET. 

ROUTE 

AT                                                               1  VOUR~  ORDER 

rf  OFF  FOR  CASH  IN            DAYS. 

MACHINE  NO. 

FRAME                           PULLEY          X                  STYLE  FEET 

Payable  ID  Funds  at  Par  in  New  York,  Indianapolis  or  Chicago,  without  Expense  to  us. 

FIG.  44. — Example  of  manifold  order,  one  copy  serving  as  original  invoice, 
one  copy  as  duplicate  invoice,  and  one  copy  as  shipping  record.  Additional 
manifolds  with  slightly  different  typesetting,  and  serving  further  purposes, 
are  shown  in  succeeding  figures.  Light  blue  bond  paper,  9  inches  wide, 
6  inches  high,  ruled  in  red. 


FOR    ENGINEERING 

DEPARTMENT 

ONLY. 


ORDER  RECD. 

WANTED 

ROUTE 


ADDRESS 
SHIPPED  TO 


FOREMAN'S 
SPECIAL  INSTRUCTIONS. 

CONSTRUCTION 

DELIVERY 

CREDIT 

SHIPPING  APPROVED  BY 


DATA  SHEETSLARMATURE SHUNT SERIES RHEOSTAT 

Return  this  Order  to  the  Office  with  Following  Data  and  All  Necessary  Information  (on  back  hereof)Complete 
when  Shipment  is  Made.  Get  Completion  Order  for  Any  Missing  Farts.        Note  Any  Special  Features 

on  Back  Hereof. 


FRAME PULLET 

RUSHES TESTED 

-REMARKS- 


STYLE  FEET. 


_SPEED_ 


-COMPLETION  ORDER 


FIG.  45. — Fourth  copy  of  manifold  order.  A  number  of  similar  mani- 
folds go  to  various  shop  departments.  White  bond  paper,  9  inches  wide,  6 
inches  high. 


146     FACTORY  ORGANIZATION  AND  ADMINISTRATION 

Fig.  45  shows  the  fourth  copy,  which  is  marked,  "For  Engineer- 
ing Department  Only,"  and  contains  same  items  as  original, 
omitting  accounting  department's  financial  memoranda,  and 
adding  technical  memoranda.  The  reverse  of  this  copy  is  a 
drawing  list,  and  is  shown  in  Fig.  46. 

The  fifth  copy  is  the  same  as  the  fourth,  excepting  that  it  is 
marked  "  For  Shop  Only."  Its  reverse  is  the  same  as  the  reverse 
of  the  fourth  copy. 

While  the  particular  company  using  the  order  form  illustrated 
preferred  to  use  a  separate  sheet  for  every  machine,  such  a  pro- 


Frame,         .           . 

.      TV.  No. 

Skids, 

.         Dr.  No. 

Field  Cores, 

Pr,  NoT 

Rock.  Arm., 

Dr.  No. 

Pole  Shoes,             . 

Pr,  N«, 

B.  Holders, 

Base,                      , 

Pr,  No, 

Studs, 

Dr.  No. 

F.  Bearing,  *          . 

,      TV  No. 

Rock.  Ring, 

Pr    No, 

B.  Bearing,            . 

TV  No. 

R.R.Bracket, 

TV.  No. 

Bear.  Caps, 

p,,  No, 

Hand  Wheel, 

Dr.  No. 

Pedestal* 

,       Pr   No. 

Dr.  No. 

Arm.  Assembly,   « 

.       Dr.  No. 

Con.  Ring  Dtls., 

Pr,  Nor 

Arm.  Space  Blks., 

.       Dr.  No. 

Con.Ring  Assy.,  . 

Pr    No. 

Arm.  Spider,         • 

-      Pr,  No 

B.H.Cables, 

Arm.  Heads, 

,       Dr.  No. 

B.H.Cable  Terms, 

.       No. 

Shaft, 

Con.  Boards, 

Dr.  No. 

Commutator           • 

.      TV.  No. 

No. 

Field  Spool,            -. 

,       Dr.  No. 

Equalizer  Terms,  . 

No. 

FIG.  46. — Reverse  of  No.  4  and  succeeding  copies  of  manifold  order  giving 
data  for  engineering  department  and  various  shop  departments.  Light 
blue  bond  paper,  9  inches  wide,  6  inches  high. 


cedure  is  not  at  all  necessary.  Order  and  invoice  may  be  simul- 
taneously written  on  a  flat-bed  typewriter,  there  being  two  col- 
umns, one  column  for  items  ordered,  another  column  for  items 
shipped.  When  the  first  partial  shipment  is  made,  entries  are 
made  into  the  column  headed  "Items  Shipped,"  and  one  copy 
of  the  several  which  are  simultaneously  written  is  used  as  an 
invoice,  and  shows  the  exact  status  of  the  order  to  the  customer. 
The  unshipped  items  are  then  transferred  by  being  copied  to  a 
new  set  of  blanks  upon  which  entries  are  made  as  soon  as  the 
second  partial  shipment  has  been  made.  It  is  customary  to  have 


THE  ORDER  DEPARTMENT  147 

an  invoice  mailed  at  the  time  a  shipment  is  made,  even  if  such 
shipment  is  but  partial. 

The  order  system  of  an  establishment  which  makes  up  goods 
in  quantity  for  stock,  of  which  it  carries  a  considerable  variety, 
will  be  quite  different  from  the  order  system  that  would'  be  best 
for  an  engineering  works. 

A  form  in  such  a  case  would  have  spaces  for  the  name  of  the 
customer,  his  address,  the  railroad  or  express  company  by  which 
to  ship.  This  sheet  is  filled  out  by  the  salesman  when  he  takes 
the  order,  with  the  foregoing  items,  and 'also  the  proper  items 
opposite  salesman's  name,  date  sold,  terms,  quantity,  list  num- 
ber, article,  and  price.  On  its  receipt  at  the  company's  office 
the  order  is  given  a  number,  and  is  properly  indexed  or  registered. 
Proper  acknowledgment  of  the  order  is  then  made;  it  next 
goes  to  the  credit  department;  thence  to  the  warehouse  de- 
partment, where  each  item  is  signed  by  the  individual  put- 
ting up  that  item;  it  is  then  inspected,  and  receives  the  inspec- 
tor's check;  the  goods  are  next  packed  and  the  order  is  checked 
by  the  shipper;  it  next  goes  to  the  billing  department,  and 
the  billing  clerk  puts  his  check  after  the  words,  "Billed  by"; 
it  is  next  examined  and  rechecked  for  corrections  of  prices,  exten- 
sions, etc.,  and  signed  opposite  the  words,  "Examined  by,"  and  is 
now  ready  to  go  to  the  bookkeeper,  who  fills  in  the  ledger  folio. 

Mail  orders,  and  orders  brought  in  directly  by  customers, 
are  transcribed  on  to  the  regular  order  form  as  described. 

In  this  type  of  business  salesmen's  records  may  be  made  up 
from  order  copies. 

In  cases  where  it  is  desirable  to  keep  a  careful  time-check  on 
each  event  in  the  handling  of  orders,  a  time-stamp  may  be  used 
to  advantage,  space  being  left  on  the  order  blank  for  all  such 
'time-stamps  which  should  appear  on  any  one  copy. 

Where  the  billing  machine  is  used  for  writing  out  the  order, 
a  large  number  of  other  forms  may  be  made  at  the  same  writing, 
the  bunch  or  pad  of  forms  being  stitchecj  at  the  left-hand  margin, 
and  each  form  printed  on  a  different  color  of  paper.  At  one 
writing,  for  instance,  we  may  have  order,  original,  and  duplicate 
invoice,  statement,  memorandum  of  draft,  posting  record,  ship- 
ping clerk's  record,  cost  department's  record,  various  shop  depart- 
ment copies,  and  acknowledgment  to  customer. 

159.  Instructions  as  to  Order  System.— Below  is  given  a 
sample  of  instructions  regarding  classification  of  shop  orders, 


148     FACTORY  ORGANIZATION  AND  ADMINISTRATION 

which  it  is  desirable  to  issue  at  the  time  of  inaugurating  a  classi- 
fied order  system : 

All  orders  emanating  from  the  office  will  pass  through  the  production 
department  office  before  being  distributed  in  the  shop.  The  production 
department  is  responsible  for  the  proper  distribution,  tracing  and  follow- 
ing up  of  all  orders  as  to  location  and  condition.  Before  distributing 
orders,  production  department  has  shop  superintendent  note  orders, 
securing  his  initials  or  those  of  his  assistant,  cut  with  conductor's 
punch,  punched  through  all  copies. 

As  regards  the  classification  of  orders  inside  the  shop,  these  are 
as  follows: 

General  series,  without  letter  prefix,  covering  new  parts  for  standard 
machines.  Manila-colored  tag. 

"A"  series,  covering  repair  or  other  parts  called  for  by  shipping 
orders  and  requiring  work  in  the  shop,  bearing  different  serial  numbers 
from  the  general  series  and  yellow  tracing  tag. 

"B"  series  (tool-room  series),  covering  new  tools,  jig,  dies,  and  other 
tools  made  in  the  shop.  Record  book  kept  by  foreman  of  tool  depart- 
ment, bearing  superintendent's  "  0.  K."  after  each  order  in  book.  Tool- 
room foreman  sends  book  daily  to  production  department,  to  have  proper 
tags  and  orders  written.  Tool-room  foreman  keeps  stub  of  tag  on  file 
till  work  is  completed,  entering  on  stub  list  of  material  used,  and  sending 
same,  when  work  is  completed,  to  production  department.  Salmon  tag. 

"C"  series — patterns.  Orders  and  tags  issued  by  production  depart- 
ment on  receipt  of  request  for  order  from  department  foreman.  Green 
tag. 

"D"  series — plant  additions,  including  fixtures.  Blue  tags  issued 
on  authorization  of  works  manager. 

Standing  non-productive  orders.  See  separate  sheet  for  detailed  list 
of  these  orders.  Special  tags  headed  Standing  "Non-productive  Order." 

In  many  classes  of  business  the  furnishing  of  repair  parts  is 
an  important  feature  of  the  business,  so  that  the  order  depart-* 
ment  may  need  to  be  divided  into  two  sub-departments  or  two 
distinct  departments,  such  as  the  contract  department  and  the 
supply  or  repair  department.  The  latter  department  will  then 
handle  all  correspondence  in  regard  to  supply  orders,  stamping 
the  original  customer's  order  with  a  time-stamp  indicating  date 
received,  when  and  by  whom  approved  for  credit,  supply  order 
number,  when  order  written,  by  whom  checked,  and  when  and 
by  whom  acknowledged. 

The  head  of  the  supply  department  must  be  well  enough 
versed  in  the  details  of  the  business  to  edit  the  original  orders, 


THE  ORDER  DEPARTMENT  149 

i.e.,  he  must  see  that  the  items  ordered  by  the  customer  are  in- 
serted in  correct  form  for  clear  understanding  by  all  in  the  factory 
who  are  to  handle  the  order.  A  single  item  asked  for  by  the 
customer  may  require  the  collection  or  manufacture  of  a  numl 
of  component  parts  or  items;  in  such  cases  a  detailed  list  of 
ponent  items  will  be  made  out  on  the  supply  department 
by  the  head  of  that  department. 

The  supply  order  will  have  to  be  written  in  manifokjT  similar 
to  a  regular  or  contract  order.  As  an  instance  of  hAw  many 
copies  will  be  required  the  following  typical  case  will  serve  to 
illustrate : 

(1)  One  original  copy.     This  goes  to  billing  clerk  as  soon  as 
order  is  written. 

(2)  One  yellow  copy  to  be  held  in  supply  department  until 
goods  are  ready  for  shipment  of  either  part  or  all.     It  is  then 
sent  to  shipping  department,  which  sends  it  to  billing  clerk  when 
shipment  of  either  part  or  all  is  made.     In  case  of  partial  ship- 
ment, billing  department  sends  the  yellow  copy  back  to  supply 
department,  where  it  goes  through  the  same  routine  as  before 
until  shipment  is  completed. 

(3)  One  blue  copy.     This  goes  to  stores  record  department. 
Stores  record  department  marks  with  small  rubber  stamp,  "In 
stock,"  all  items  regularly  carried  in  stock,  and  "To  be  taken  from 

Stock  Order  No "all  items  which  are  regular  stock,  but  of 

which  there  is  not  a  supply  in  the  stock-room. 

(4)  One   fawn   copy   for   stock-room.     Head   storekeeper   of 
finished  parts  will  get  out  all  parts  which  are  ready  to  ship, 
checking  same  off  his  copy  of  the  supply  order,  keeping  the  un- 
filled copies  on  one  file  board,  the  partially  filled  ones  on  another, 
and  filing  away  the  completely  filled  ones. 

Head  attendant  in  finished  parts  storeroom  puts  the  items 
for  any  one  shipment  into  a  bin  by  themselves.  When  he  has 
all  items  in  the  bin  which  he  can  get,  he  designates  this  by  put- 
ting a  tag  marked  "Complete,"  or  "Partial,"  into  the  bin,  to- 
gether with  a  tag  bearing  the  order  number.  Some  one  regularly 
delegated  from  the  supply  department  calls  several  times  a  day 
to  see  these  bins,  taking  with  him  the  supply  department's  file 
board  of  all  yellow  copies  of  supply  orders,  and  leaving  with 
shipping  department  the  copies  of  orders  for  which  goods  are 
ready  for  either  entire  or  partial  shipment.  However,  head 
storeroom  attendant  will  not  depend  on  these  personal  calls 


150     FACTORY  ORGANIZATION  AND  ADMINISTRATION 

from  supply  department  as  the  only  means  of  advising  that 
goods  are  ready  for  shipment,  but  will  send  a  daily  report  to 
supply  department  of  all  orders  ready  for  complete  and  for  partial 
shipment. 

Supply  department  decides  whether  or  not  partial  shipment 
is  to  be  made  at  once,  and  attends  to  any  correspondence  with 
customer  which  is  necessitated  by  inability  to  ship  entire  order. 

(5)  One  pink  copy  of  order  for  a  continuous  numerical  file 
in  supply  department  for  reference. 

(6)  One  white  copy  for  continuous  numerical  file  in  contract 
order  department,  which  needs  sometimes  to  know  about  cus- 
tomers' supply  orders.     This  can  be  included  or  omitted  as  the 
conditions  of  the  business  may  demand. 

160.  Special  Orders. — For  all  items  not  regularly  carried,  the 
stores  record  department  writes  a  request  on  production  depart- 
ment to  issue  "Special  Manufacturing  Order,"  covering  such 
parts  as  have  to  be  specially  made. 


SPECIAL  MFG.  ORDER 

ISSUED  BY  STORES  RECORD  DEP'T.    A/C  SHIPPING  ORDER  No. 


FOLLOWING  ITEMS  NOT  REGULARLY  IN  STOCK  ARE  TO  BE  MANUFACTURED  FOR  ABOVE 

SHIPPING  ORDER  IN  ACCORDANCE  WITH  DETAILED  SPECIFICATIONS 

AND  MATERIAL  LIST  AS  BELOW: 


ORDER  No. 


FIG.  47. — Form  of  "special  manufacturing  order"  which  selects  from  a 
shipping  or  supply  order  only  those  items  which  have  to  be  made  in  the  shop 
especially  for  this  shipping  order.  It  omits  all  items  with  which  the  shop 
is  not  concerned  and  bears  the  same  number  as  the  complete  shipping  order. 
Salmon  colored  bond  paper,  81/2  inches  wide,  7  inches  high. 

The  stores  record  department  will  also  issue  requisitions  on 
the  purchasing  department  for  any  items  which  have  to  be 
purchased  on  the  supply  order.  The  castings  record  clerk  of 
the  department  will  put  in  the  requisition  for  any  castings  re- 
quired, and  the  head  of  the  stores  record  department  will  put  in 
the  requisition  for  other  purchased  items. 

Fig.  47  shows  the  general  form  for  the  "Special  Manufac- 
turing Order,"  which  is  a  sub-order  bearing  same  number  as  the 


THE  ORDER  DEPARTMENT  151 

supply  order  on  whose  account  it  is  issued.  One  copy  of  each 
"Special  Manufacturing  Order"  is  sent  to  stock-room. 

A  form  is  also  used  for  notifying  the  production  department 
to  hurry  through  stock  orders  covering  any  parts  regularly  stock 
parts,  for  which  there  is  a  stock  order  in  the  shop,  but  no  pieces 
in  the  stock-room. 

All  the  above  details  are  attended  to  by  the  stores  record 
department. 

161.  Changes  in  Orders. — Changes  in  orders  should  be  written 
out  on  regular  order  forms,  bearing  same  number  as  original  order, 
with  the  word  "Change"  printed  diagonally  across  the  form  in 
large,  open-skeleton  type  of  red  color.  They  are  then  filed  with 
the  original  order  by  all  departments  receiving  same. 

The  above  outline  covers  the  duties  which  should  be  assigned 
to  an  order  department  or  order  clerk  and  a  supply  department. 
The  detailed  issuing  of  the  sub-orders  which  are  necessitated  by 
the  issuing  of  a  general  or  main  order  for  complete  machines,  and 
the  following  up  of  such  orders,  are  matters  described  in  detail 
in  subsequent  chapters. 

REFERENCE 
COOK:  "Factory  Management,"  Chapter  VH. 


CHAPTER  XII 
BILLS  OF  MATERIAL 

162.  Bill  of  Material  Defined.— The  bill  of  material  for  a 
manufactured  product,  whether  that  product  be  a  machine  or  a 
piece  of  furniture,  is  a  list  of  all  the  individual  component  pieces 
which,  when  properly  put  together,  constitute  the  finished  article. 

In  an  establishment  which  makes  to  order  many  different 
machines  or  complex  articles,  the  preparation  of  bills  of  material 
is  a  far  more  extensive  work  than  in  factories  making  but  few 
different  types  of  product  and  shipping  from  stock.  In  either 
of  the  above-mentioned  classes  of  product,  however,  the  purchas- 
ing of  the  necessary  raw  materials  and  manufactured  purchased 
parts,  as  well  as  all  the  manufacturing  processes,  are  greatly 
simplified  and  facilitated  by  the  prompt  preparation  of  accurate 
and  complete  bills  of  material  for  the  use  of  all  departments  which 
need  to  know  fully  and  exactly  all  the  component  parts  of  the 
finished  product. 

163.  Grouping  of  Parts. — The  bill  of  material  or  list  of  parts, 
in  order  to  be  most  useful  in  various  departments,  needs  some- 
times to  be  arranged  in  various  ways.     For  instance,  for  most 
convenient  use  in  the  purchasing  department  the  list  is  best 
arranged  according  to  classes  of  material,  the  steel  castings  being 
listed  in  one  group,  the  iron  castings  in  another  group,  brass 
castings  in  another,  bar  stock  in  another,  etc.     For  the  produc- 
tion department,  if  it  has  its  stock  records  arranged  by  mark 
numbers  of  individual  pieces,  the  list  may  more  advantageously 
be  arranged  according  to  mark  numbers.     For  the  various  shop 
departments,  a  bill  arranged  according  to  sequence  of  building 
of  the  various  assembly  and  sub-assembly  groups  will  be  most 
satisfactory  to  work  from.     The  last  type  of  bill  of  material  is 
the  arrangement  most  generally  in  use  if  but  one  arrangement  is 
to  be  followed. 

The  bill  of  material  must  be  specific  and  complete  in  regard 
to  dimensions  and  materials  if  these  points  are  not  covered  by  a 
drawing  specified  in  the  bill.  It  is  necessary  that  the  man  in 

152 


BILLS  OF  MATERIAL 


153 


charge  of  making  bills  of  material  have  a  full  knowledge  of  the 
exact  materials  that  are  required  in  each  case.  He  needs  also 
to  know  what  materials  are  standard  commercial  articles,  and 
what  sizes  and  dimensions,  are  most  commonly  in  stock  in  the 
general  market.  It  is  important  that  the  head  of  the  bill  of 
material  department  be  a  man  whose  opinion  will  be  respected 
by  the  drafting  and  designing  departments,  so  that  he  may  be 
free  to  make  requests  for  modifications  of  the  items  specified 
by  draftsmen  and  designers  in  order  to  secure  conformity  with 
commercial  practice  or  to  the  standards  already  in  use  in  the  par- 
ticular establishment  in  which  he  is  employed. 

164.  Special  Parts. — It  is  very  desirable  that  the  stores 
department  furnish  the  engineering  and  drafting  and  bill  of 
material  departments  from  time  to  time  lists  of  unused  special 
castings,  large  shafts,  large  forgings,  etc.,  which  might  possibly 


c 

L 
D 

->. 

MATERIAL  Lis 

DRWG.  NO..  N0..8HEE 
T           nunpR  NO,                         SHFFT  t 

T8 

TI 

F 

m 

[ 

DCATIOf 

1 

rfO*.  

APPARATUS 

ncTA-n                                    OATF 

LINE 

&m 

NAME  OF  PART 

DRWQ. 

3YMB. 

FILE 
NO. 

DESCRIPTION 

1 

2 

3 

4 

5 

6 

7 

8 

-  ">^^ 



^  ^...    -  -,  ~- 

^-^  v 

FIG.  48. — Simplest  form  lor  material  list.     White  bond  paper,  81/2  inches 
wide,  11  inches  high,  red  and  blue  ruling. 

be  specified  in  bills  of  material  as  substitutes  in  place  of  new 
purchases  or  new  designs.  In  many  an  establishment  there  will 
be  found  parts  in  stock  which  it  is  desirable  to  adapt  for  use  for  a 
particular  job,  and  which  can  be  used  without  in  any  way  inter- 
fering with  standardization.  Card  records  covering  any  such 
items  will  be  found  useful,  and  when  the  items  are  allotted  they 
are  marked  off  the  cards.  In  order  to  make  this  system  of  using 
up  special  parts  easily  workable,  it  is  advisable  to  mention  on  the 
card  the  location  of  the  item  in  the  buildings  or  yards.  A  symbol 
or  number  may  also  be  painted  on  the  piece  and  recorded  on  the 
card.  A  sketch  showing  any  special  features  may  also  be  shown 
on  the  card  record,  also  any  defects.  It  may  be  advisable  to  use  a 
separate  card  for  each  separate  piece  if  the  pieces  are  large  and 
special. 


154     FACTORY  ORGANIZATION  AND  ADMINISTRATION 


Fig.  48  shows  a  typical  form  for  bill  of  material.  The  first 
column  is  merely  a  consecutive  numbering  of  the  lines  and  affords 
a  concise  system  of  reference  to  any  items  in  the  bill. 

165.  Departmental  Bills  of  Material. — Where  a  factory  is 
divided  into  departments  whose  work  is  quite  independent  of 
each  other,  it  may  be  found  advisable  to  issue  separate  material 
lists  for  each  department,  such  departmental  list  covering  only 
such  items  as  the  department  in  question  needs  to  be  advised  of. 
For  instance,  there  may  be  distinct  and  different  bills  prepared 
respectively  for  the  pattern  department,  the  group  assembly. 


DRAWING  NO. 

PATTERN  NO. 

QUANTITY 
REQUIRED 

NAME  OF  PART 

SHOP    ORDER  TAGS 

NO.  PIECES  |       DATE 

3ATE  WORK 

DATE 

WHEE~L       GROUP 

V-1321 

B.N.F.  407 

2 

Front  hubs,                      4/1 

V-1321 

B.N.F.  408 

2 

Front  flanges,                4/2 

1 

5-3/4'  '  balls 

2 

Inner  ball  cups  &  ret  .  4/3 

V-1349 

15-5/8"    " 

2 

Outer    '  '        "     "  "      4/4 

1/2-24" 

2 

Oil  caps,                           4/5 

V-1326 

B.N.F.  409 

2 

Dust  caps,                         4/6 

V-1317 

B.N.F.  404 

2 

Rear  hubs  &  brake  drums  4/ 

7. 

V-1317 

B.N.F.  405 

2 

'  '     flanges,                  4/8 

3/16x3/16x 

1-1/2 

2 

Keys,                                  4/9 

i; 

-3/4"  balls 

2 

Inner  ball  cups  &  ret  .4/10 

V-1340 

15-5/8"    " 

2 

Outer    "  4/11 

1/2-24  '  ' 

2 

Oil  caps,                         4/12 

V-1327 

B.N.F.  410 

2 

Dust  caps,                        4/13 

*  •  

^  

2 

Felt  washersj^.^^    4/15 

FIG.  49. — Bill  of  material  as  used  in  automobile  work,  dividing  the 
machine  into  groups  and  designating  each  part  by  a  symbol  indicating  the 
group  into  which  it  belongs  and  the  number  of  parts  in  each  group.  White 
bond  paper,  81/2  inches  wide,  11  inches  high. 

department,  and  the  erecting  department,  each  of  these  separate 
bills  of  material  covering  pnly  such  items  as  are  needed  for  the 
complete  information  of  the  department  in  question,  in  order  that 
the  work  in  that  department  may  be  correctly  done. 

166.  Assembly  Groups. — Fig.  49  shows  a  bill  of  material  in 
which  the  parts  are  arranged  by  groups  as  used  in  automobile 
manufacturing.  In  this  list  it  will  be  noted  that  a  further  identi- 
fication or  mark  number  is  mentioned  immediately  following  the 
name  of  the  part.  For  instance,  the  front  hubs,  in  addition  to 
being  identified  by  the  drawing  number  and  the  pattern  number, 
are  known  as  4/1,  meaning  Part  No.  1  in  Group  4  of  this  type  of 
car. 


BILLS  OF  MATERIAL 


155 


A  similar  bill  of  material  in  which  the  parts  are  arranged  by 
assembly  groups,  as  used  in  a  dynamo  and  motor  factory,  is 
shown  in  Fig.  50.  In  this  bill  an  attempt  was  made  to  desig- 
nate materials  by  different  styles  of  type,  the  heavy  block  type 
signifying  cast  iron,  the  heavy  italics  specifying  cast  brass,  and 
the  light  type  signifying  articles  made  of  bar  stock  or  purchased. 
This  plan  is  as  a  rule  not  satisfactory,  however,  as  it  may  be 
desirable  in  special  instances  to  use  steel  castings  instead  of  cast 
iron,  bronze  or  malleable  iron  in  the  place  of  brass,  nickel  steel 


Account  o/_ 
tn'a_ 


.Type. 


H.P.K.W. 


To  be  completed,  • 
Remarks: 


R.p.m. 


Size  Armature 


Net  Weiaht 


«™.«.«  Weight 


Size 

Patten 

No. 


Weigh 


Drawing 
No. 


Cost  of 


Time      Time      Coat  of 

Men        Boja 


SPIDER,  SHAFT   AND   RINGS 


Spider  niid  Sleeve 


Flanged  King 


End  Ring 


Ventilating  Ring 


Steel  Rinss(Discs) 


Brass  Strip 


Steel  for  Shaft 


Armature  Keys 


Commutator  Keys 


Pulley  Keys 


Hex.  bd.  Cap  Screws 


FIG.  50. — Bill  of  material  as  applied  to  dynamo  and  motor  manufacture. 
Components  arranged  by  groups,  tracing  and  cost  record  columns  on  same 
sheet  with  list  of  parts.  White  bond  paper,  81/2  inches  wide,  11  inches 
high. 

in  place  of  machinery  steel,  etc.,  and  it  is  simpler  to  leave  a  col- 
umn for  material  to  be  filled  in  in  each  particular  bill  of  material. 
167.  Bill  of  Material  as  Tracing  or  Cost  Record. — The  last 
two  examples  of  bills  of  materials  also  contain  columns  for  use 
in  tracing  or  following  up  purchases  or  manufacture  of  material 
in  the  shop,  and  in  the  last  example,  columns  for  figuring  costs 
of  the  separate  parts.  As  a  general  rule  it  is  undesirable  to  make 
the  bill  of  material  fill  so  many  different  purposes,  as  it  crowds 
too  much  into  a  small  space  and  confuses  departments  who  have 
no  interest  in  the  following  up  or  figuring  of  costs.  It  will  gen- 
erally be  found  desirable  to  have  separate  forms  printed  for  use 


156     FACTORY  ORGANIZATION  AND  ADMINISTRATION 

by  the  cost  department,  the  tracing  department,  and  any  other 
departments  that  might  have  to  use  the  bill  of  material  in  con- 
nection with  their  work,  such  forms  being  printed  on  sheets  of 
such  size  that  they  may  be  bound  in  with  sheets  of  material,  and 
opposite  the  respective  sheets  listing  the  material  items.  (See 
Figs.  92  and  152  as  examples  of  such  insert  sheets.) 

168.  Changes  in  Bills  of  Material. — One  of  the  most  vexing 
problems  in  manufacturing  is  that  of  changes  or  corrections  in 
bills  of  material.  It  is  seldom  that  a  machine  or  any  apparatus 
consisting  of  a  considerable  number  of  parts  is  completely  and 
correctly  described  in  the  first  bill  of  material,  because  as  a  rule 
it  is  necessary  to  get  the  apparatus  started  and  some  of  the  lead- 
ing items  ordered  in  the  shop  or  outside  before  the  entire  bill 
can  be  completely  checked  and  crystallized.  Changes  in  the 
way  of  insertion  of  omissions  do  not  usually  cause  much  incon- 
venience or  loss  provided  they  are  not  allowed  to  pass  unnoticed 
until  the  order  is  well  under  way.  The  type  of  alteration  that 
does  cause  loss  almost  invariably  is  a  change  in  design  inaugu- 
rated after  a  bill  of  material  has  been  sent  out  into  the  shop  and 
work  started.  This  type  of  change  should  be  most  carefully 
guarded  against.  It  is  easy  for  a  designing  department  to  get 
into  the  bad  habit  of  making  changes  after  work  has  been  started. 
The  persistence  in  this  practice  of  making  changes  in  this  way 
may  be  a  matter  of  sufficient  seriousness  to  ruin  a  manufacturing 
establishment.  Not  only  does  this  practice  entail  enormously 
increased  costs  of  manufacture,  but  it  results  in  so  many  different 
types  of  machines  being  sold  that  the  supplying  of  repair  parts 
becomes  a  most  complicated  problem,  necessitating  the  most 
careful  and  complete  records  of  each  machine  sold,  and  either  the 
carrying  of  an  enormous  variety  of  repair  parts,  or  else  making 
the  customer  wait  for  a  long  time  for  a  repair  part  when  he  has  a 
break-down,  and  making  the  part  cost  him  so  much  on  account 
of  its  being  made  as  a  single  piece  that  he  becomes  dissatisfied 
with  the  delay  and  high  price. 

One  way  of  recording  alterations  is  to  issue  a  separate  sheet 
of  the  bill  of  material  for  each  set  of  alterations.  A  form  for 
use  with  this  method  is  shown  in  Fig.  51. 

In  case  this  method  is  used,  it  is  necessary  to  draw  a  line 
through  the  changed  item  or  inter-line  for  omitted  items,  and 
make  small  notes  referring  to  the  alteration-sheet. 

Another  way  of  recording  changes  is  by  binding  the  bill  of 


BILLS  OF  MATERIAL 


157 


material  in  a  cover  of  plain  tough  manila  paper,  and  entering  on 
inside  of  cover  a  rubber  stamp  every  time  a  change  is  made,  such 
rubber  stamp  bearing  the  date  the  change  was  made  and  any 
other  necessary  data,  and  then  entering  a  reference  to  the  rubber 
stamp  impression  covering  the  correction  or  omission  in  its 
proper  place  on  the  original  bill  of  material  by  inter-lining. 

In  case  it  is  necessary  to  recall  bills  of  material  from  various 
departments  for  the  purpose  of  entering  changes,  such  recalling 
must  be  done  in  a  systematic  manner  with  the  full  knowledge  of 
the  departments  from  which  the  bills  are  recalled.  A  system  of 
receipts  may  be  desirable  for  this  purpose,  and  a  department 
should  be  permitted  to  finish  any  entries  that  may  be  in  process 


rr>                                                    rn 

RREC.TIUN  ORDER  No.  Drwg.  NQ,  Sheet  No,  
SERIAL  LIST  FILE  No.  App,  ^Order  No-  

Locafioi 
Written 

!                                                                                           MA 

hy                                     Date 

No.  of 
Pieces. 

NAME  OF  PART. 

1 

File 
No. 

DESCRIPTION. 

JOB. 

Matl. 
Reed, 
or  Deld. 

Weight. 

Iss. 

btr. 

sa 

___J- 

1  1 

=d±-Z  -^~^~ 

This  order  to  bear  consecutive  number  (l,2,3,etc..)  for  Correction  Orders,  issued  on  any  Shop  Order.        State  definitely  why  it  was 
necessary  to  issue  this  Correction  Order. 

FIG.  51. — Correction  sheet  for  bill  of  material.     White  bond  paper,  10  inches 
wide,  9  inches  high,  ruled  in  red  and  blue. 

of  being  made  at  the  time  the  bill  is  recalled  before  the  bill  is 
taken  away  from  that  department. 

169.  Getting  Work  Started  before  Completion  of  Bill  of 
Material. — The  preparation  of  a  complete  bill  of  material  may  be 
a  matter  requiring  several  days,  and  perhaps  several  weeks.  In 
the  latter  case  it  may  be  desirable  to  get  some  of  the  work  under 
way  before  the  bill  of  material  can  be  completed  as  a  whole.  This 
would  be  particularly  likely  in  the  case  of  purchased  items,  which 
require  prompt  ordering  so  as  to  save  every  possible  day  of  time. 
For  this  reason  it  may  be  desirable  to  have  the  head  of  the  bill  of 
material  department  initiate  the  ordering  of  such  items  by  having 
him  make  out  a  list  of  these  items  on  a  sheet  which  constitutes  a 
request  for  the  immediate  issuing  of  requisitions  for  same,  proper 
notations  being  made  on  the  bill  of  material  that  such  requests 


158     FACTORY  ORGANIZATION  AND  ADMINISTRATION 


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for  requisitions  were  made. 
This  in  order  to  prevent 
the  duplication  of  purchase 
orders  for  these  items.  If 
the  head  of  the  stores  de- 
partment is  the  person  who 
regularly  orders  all  mater- 
ials, then  the  procedure 
takes  the  form  of  a  request 
on  the  head  of  the  stores 
department  to  make  re- 
quisitions on  the  purchas- 
ing agent  for  the  items  in 
question. 

Fig.  52  shows  a  form 
used  in  this  manner  in 
order  to  expedite  the  order- 
ing of  necessary  materials 
before  the  completed  bill 
of  material  is  issued. 

The  head  of  the  stores 
department  should  have  a 
system  of  annotating  the 
various  items  in  the  bill  of 
material  so  as  to  designate 
what  disposition  he  has 
made  of  them,  such  as 
ordering  the  necessary  ma- 
terial or  withdrawing  the 
items  from  finished  stock 
on  hand,  etc.  As  before 
stated,  it  is  preferable  to 
provide  separate  sheets  for 
keeping  these  annotations 
referring  to  stores  and  stock 
records,  production  de- 
partment records,  tracing 
records,  etc.,  such  sheets 
being  of  dimensions  easily 
bound  in  with  a  copy  of  the 
-bill  of  material. 


CHAPTER  XIII 
THE  DRAFTING  DEPARTMENT 

170.  Functions   of   Drafting   Department. — The  drafting  de- 
partment  usually  includes   the  designing   department  in  most 
manufacturing  establishments,  excepting  in  a  few  large  concerns 
where  the  designing  is  done  by  a  separate  department  which 
furnishes  sketches  and  the  results  of  calculations  to  the  drafting 
department. 

The  work  of  the  drafting  department  will  usually  be  divided 
into  such  work  as  designing,  drawing,  tracing,  blue-printing, 
indexing,  and  filing.  The  designing  of  tools  or  the  making  of 
tool  drawings  in  accordance  with  the  sketches  or  instructions  of 
the  head  of  the  tool-making  department  may  constitute  another 
subdivision  of  the  drafting  department. 

171.  Numbering  Parts. — It  is  generally  desirable  to  designate 
all  parts  by  "mark  number"  or  "part  number."     This  system 
necessitates  the  keeping  of  a  consecutive  number  record  of  parts, 
in  which  is  given  a  brief  definition  of  the  piece  together  with  refer- 
ence to  the  drawing  number,  and  the  pattern  number  if  there  is  a 
pattern.     There  should  also  be  a  consecutively  numbered  pattern 
record  in  which  is  given  also  a  definition  of  the  piece,  the  drawing 
number,  and  the  mark  or  part  number.     In  order  to  avoid  dupli- 
cation of  drawings  and  of  patterns,  and  also  in  order  to  avoid 
giving  different  mark  numbers  to  the  same  purchased  finished 
parts,  such  as  bolts,  screws,  etc.,  there  must  be  an  alphabetically 
arranged  record  of  concrete  names  of  parts  in  which  may  be  found 
the  corresponding  mark  numbers  and  pattern  numbers. 

Most  drawing  rooms  give  no  attention  to  indexing  as  above 
suggested.  The  natural  result  of  this  neglect  is  that  the  same  part 
is  drawn  over  and  over  again,  and  that  separate  patterns  are  made 
for  parts  for  which  some  existing  pattern  could  have  been  used. 

172.  Standardization  of  Parts.— There  is  hardly  a  machine  of 
any  kind  in  which  there  will  not  be  found  certain  details  which 
recur  again  and  again  in  similar  forms  on  other  machines.     If  a 
draftsman  follows  the  whim  or  inspiration  of  the  moment  he  is 

159 


160     FACTORY  ORGANIZATION  AND  ADMINISTRATION 


PULLEYS. 


WIDTH  FACE      STYLE  FACE        DIA.  HUB  BORE  WEB  ARMS  STYLE 


DRAW.    NO. 


BUSHING. 


LENGTH  BORE 


THICK  DIA. 


DIA.  LENGTH 


FIGS.  53  and  54. — (Upper  card):  Record  of  pulley  drawings,  giving 
style,  pattern  number,  and  dimensions;  (Lower  card):  Similar  record  for 
bushings.  White  cards  5  inches  wide,  3  inches  high. 


PITCH  GEAR.                                        OUTSIDE  DIA. 

PITCH  LINE 
DIA. 

NO 
TEETH- 

W.DTH                                                                                     HUB 

•o»«            ^H             ZZS, 

WEB 

ARMS 

PATT.   NO.                                    DRAW  No.                                       DATE 

REMARKS: 

FIG.  55. — Drafting  department  record  for  drawings  of  gears.     White  card, 
5  inches  wide,  3  inches  high. 


THE  DRAFTING  DEPARTMENT 


161 


likely  to  make  a  number  of  different  designs  of  such  details, 
necessitating  different  patterns,  different  castings,  and  different 
tools  for  machining,  when  by  a  little  foresight  and  system  a  single 
design  of  each  detail,  with  but  a  single  pattern,  one  variety  of 
casting,  and  one  set  of  tools,  would  have  answered  for  all  purposes. 
Among  such  parts  might  be  mentioned  gears,  bushings,  levers, 
pulleys,  bearing  brackets,  collars,  bolts,  nuts,  and  washers.  If  a 
card  index  record  is  kept  of  the  above-named  parts,  recording 
briefly  the  dimensions  adopted  whenever  such  a  part  is  designed, 
and  this  index  is  referred  to  whenever  it  becomes  necessary  to 
embody  such  parts  in  a  design  of  any  machine,  considerable 


BEARING  BRACKET. 

HIGH.*A. 

1 

^ 

^           J.T- 

1 

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h 

F 

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I 

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k 

Z^ 
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B 

c 

D               E 

F                           6                REMARKS. 

PATT.  N^ 

DRAW.  N^ 

DATE 

FIG.  56. — Drafting  department  record  for  drawings  of  bearing  brackets. 
White  card,  5  inches  wide,  3  inches  high. 

saving  will  result,  due  to  the  fact  that  the  minimum  variety  of 
such  details  is  maintained. 

The  two  forms  herewith  given  are  such  as  are  used  for  this 
purpose  by  a  firm  of  leading  printing-press  builders,  who  take  a 
particular  pride  in  the  fact  that  although  they  build  intricate 
machines,  these  machines  are  composed  of  detail  parts  which 
appear  over  and  over  again  through  their  whole  line  of  designs, 
thus  keeping  down  their  expense  for  patterns,  tools  and  store- 
room space  and  records. 

173.  Recording  Data  for  Standard  Detail  Parts.— Fig.  53  is  a 
record  of  pulley  drawings  which  gives  all  the  dimensions  and 


162     FACTORY  ORGANIZATION  AND  ADMINISTRATION 


details  as  to  style.  Other  blank  spaces  show  the  file  number 
of  the  drawing  and  the  pattern  number.  By  reference  to  this 
card,  which  is  filed  in  an  alphabetical  index,  it  can  be  ascertained 
at  once  whether  the  drawings  on  hand  will  fill  the  present  need. 

A  similar  file  card  for  bushings  is  shown  in  Fig.  54.  The 
details  for  filing  are  the  same  as  on  the  pattern  card,  and  the 
dimensions  of  the  body,  flange,  and  nose  are  given.  These  are 
samples  of  but  many  varieties  of  index  cards  which  can  be  used 
in  a  convenient  system  of  filing  drawings. 

Fig.  55  shows  a  form  for  recording  data  for  gears,  and  Fig.  56 
a  form  for  recording  bearing  brackets. 

Temporary  drawings  or  sketches  should  never  be  used.  It 
will  take  but  a  short  time  longer  to  get  out  a  tracing  and  blue- 


COMPILED     BY  —  -..           DATE 
INSPECTED    BV  

DRAWING  LIST  No,__ 

SHEETS        SHEET  NO                                                NOT    COMPLETED 

FIRST 
MADE 
FOR 

NAME  OF  DRAWING 

DRAWING  OR  LIST  NO. 

GROUP  OR 
PtftT  NO. 

NO.  OF 
PARTS 

D»T[  ' 
AODCD 

DATE 
CHANGIO 

•<^——^-^" 

—  -             —  '  

^=^131 

FIG.  57. — Form  for  drawing  list  covering  all  drawings  pertaining  to  any 
one  machine  or  order,  a  briefer  reference  than  the  complete  bill  of  material. 
Pale  green  bond  paper,  81/2  inches  wide,  11  inches  high.  Thin  paper. 

print,  and  then  there  will  be  no  risks  run  of  losing  the  drawing 
or  of  questioning  its  having  been  tampered  with. 

174.  Drawing  Lists. — While  the  bill  of  material  for  a  complete 
machine  may  give  a  list  of  all  of  the  drawings,  it  is  usually  de- 
sirable to  prepare  for  any  one  machine  a  complete  drawing  list, 
such  list  being  confined  only  to  the  articles  for  which  drawings 
are  made,  and  serving  an  entirely  different  purpose  from  the  bill 
of  material,  which  lists  minutely  every  item  in  the  machine. 

A  form  for  drawing  list  is  shown  in  Fig.  57. 

175.  Filing  Tracings. — A  fireproof  storage  vault  needs  to  be 
provided  for  the  filing  of  tracings.     The  most  convenient  methods 
of  filing  will  be  a  matter  for  deciding  in  the  especial  manufactur- 
ing establishment  concerned.     In  some  cases  it  might  be  ad- 
vantageous   to    file   tracings  wholly  by   consecutive  numbers, 


THE  DRAFTING  DEPARTMENT  163 

irrespective  of  dimensions.  In  other  cases  it  will  be  desirable 
to  file  by  class  or  dimension  of  sheets,  and  in  still  further  cases  it 
might  possibly  be  desirable  to  have  tracings  for  any  one  machine 
filed  together.  The  last-named  method,  however,  will  generally 
conflict  with  the  principle  of  using  the  same  tracing  and  the  same 
part  in  a  number  of  different  machines,  and  the  same  purpose  is 
answered  by  the  drawing  list  previously  referred  to.  The  most 
common  device  for  filing  tracings  is  a  shallow  vertical  drawer 
with  triangular  metal  corner  pieces  in  the  far  inside  corners,  to 
prevent  the  tracings  from  curling  up,  and  a  piece  of  bent  wire 
swinging  in  screw  eyes  inserted  in  the  inside  of  the  front  of  the 
drawer  to  act  as  a  light  weight.  Sometimes  a  sheet  of  galvan- 
ized steel  is  used  as  a  weight. 

176.  Stock   of  Blue-prints. — A  stock  of  blue-prints  is  often 
desirable  in  order  that  there  need  be  no  delay  in  furnishing  a  blue- 
print when  asked  for.     Such  blue-print  stock  does  not  need  to  be 
in  any  fire-proof  location,  and  can  be  kept  in  drawers  similar  to 
those  described  for  tracings,  in  cabinets  of  a  height  such  that  the 
top  of  the  cabinet  forms  a  handy  place  for  laying  out  a  blue-print 
when  consulting  it. 

177.  Changes  in  Drawings  or  Patterns. — In  changing  drawings 
and  patterns  it  is  best  to  use  an  entirely  new  number  for  the 
changed  drawing  or  pattern,  and  not  to  use  any  system  of  pre- 
fixes or  affixes.     The  latter  method  merely  complicates  matters. 
When  a  drawing  is  changed  a  notation  should  be  made  referring 
to  the  number  of  the  new  drawing,  and  on  the  new  drawing  a 
notation  should  be  made  referring  to  the  old  one.     In  the  case  of 
patterns,  if  the  old  pattern  is  to  be  altered  in  order  to  make 
the  new  one,  the  pattern  record  must  show  such  alteration.     The 
alteration  should  always  be  made,  if  possible,  in  such  a  manner 
that  the  omission  or  addition  of  certain  pieces  will  permit  of  the 
making  of  the  casting  of  the  old  style.     The  reason  for  these 
policies  in  connection  with  changes  is  that  it  may  be  necessary 
to  replace  pieces  of  the  old  style,  and  it  is  not  desired  to  carry  any 
in  stock,  but.  it  may  be  desirable  to  make  them  on  short  notice  in 
accordance  with  the  old  style. 

178.  Blue-prints  for  Shop  Use. — Blue-prints  for  shop  use  are 
usually  carried  in  stock  in  a  blue-print  issuing  room  adjacent 
to  the  tool  issuing  room,  and  in  many  shops  it  is  desirable  that 
such  blue-prints  be  mounted.     They  may  be  mounted  on  tar- 
board,   and  made  washable  and  water-proof  by  giving  them 


164     FACTORY  ORGANIZATION  AND  ADMINISTRATION 


first  a  coat  of  white  glue  and  then  a  coat  of  white  Damar  varnish. 
Curling  may  be  prevented  by  pasting  a  blank  piece  of  paper  on 
the  back  of  the  mount.  In  place  of  tar-board  galvanized  steel 
may  be  used.  The  necessary  smoothing  off  of  the  burr 
on  the  edge  and  the  heavier  weight  of  the  steel  make  it  dis- 
advantageous in  some  respects,  though  it  will  outwear  the  tar- 
board  as  a  mount. 

179.  Titles  of  Drawings. — Titles  of  drawings  should  contain 
sufficient  information  to  tell  all  about  the  drawing  without  need 
of  referring  to  any  index.  The  title  should  designate  the  name  of 
the  complete  machine  or  article  which  the  drawing  represents  or 
of  which  it  is  a  part,  and  should  state  also  the  name  of  the  indi- 
vidual piece  or  pieces  shown.  It  should  designate  the  scale  to 
which  the  drawing  is  made,  the  date  drawn,  by  whom  drawn, 
by  whom  traced,  by  whom  checked. 


BLANK  MACHINE  MFG.  Co..  CHICAGO,  ILL. 

DRAWN  BY     TRACED  BY       SCALE         DATE 


FIG.  58. — Title  printed  on  small  piece  of  tracing  cloth,  41/2  inches  wide, 

21/2  inches  high. 

A  lot  of  time  is  wasted  in  many  drawing  rooms  in  making 
titles  and  border  lines  by  hand.  If  border  lines  are  wanted,  they 
should  be  printed  on  all  standard  size  tracing  sheets.  The  title 
plate  should  be  printed  in  on  the  lower  right-hand  corner,  in 
order  that  it  may  be  easily  seen  when  the  drawings  are  filed  away 
in  drawers.  If  there  is  considerable  occasion  to  use  tracing 
sheets  of  sizes  other  than  standard,  it  may  be  found  advantageous 
to  have  title  form  printed  on  small  pieces  of  tracing  cloth  or 
tracing  paper,  and  paste  these  on  the  lower  right-hand  corner 
of  the  special  sized  sheet.  Fig.  58  shows  a  title  blank  printed 
on  tracing  cloth  to  serve  this  purpose. 

180.  Detail  Drawings  for  Shop  Use. — It  has  been  found 
advantageous  in  many  establishments  to  prepare  distinct  draw- 
ings for  the  shop,  such  drawings  showing  only  the  dimensions 
which  are  absolutely  necessary  for  the  shop  to  know  in  order  to 
do  the  work  that  has  to  be  done  on  the  piece.  Such  shop  draw- 


THE  DRAFTING  DEPARTMENT 


165 


ings  are  most  advantageously  made  to  show  but  a  single  piece 
on  one  tracing  or  blue-print,  and  should  specify  limits  of  accuracy, 
gages  to  be  used,  etc.  Some  shops  have  found  it  to  be  a  good 
practice  to  send  a  blue-print  from  the  production  department 
with  each  production  tag,  such  blue-print  and  tag  following  the 
work  through  the  shop.  In  order  to  keep  the  print  and  tag 
clean  they  may  be  put  into  an  envelope  of  tough  paper,  such 
envelope  bearing  on  the  outside  merely  the  shop  order  number, 
the  mark  number  of  the  piece  and  the  number  of  pieces.  In 
this  way  the  tag  and  blue-print  will  not  get  nearly  as  oily  and 


Tap  for  %"Scr. 


NAME  OF  PIECE 

Back  Gear  Shifter  Level    [P.  &  C.  Hd.l 


QUANTITY  4  U> 

1C.  1 


SYMBOL  Of  MACHINES  USED  C 

P  22,  G  24,  H  27 


TR.      B.S.3-21-10 


CH.     H.R.4-13.10 


THE  LODGE  &  SHIPLEY  MACHINE  TOOL  CO 

CINCINNATI,  OHIO,  U  S.A. 


UPERSEDES  DBAWIN8 


SUPERSEDES  BY  DWS 


PIECE  NO 

117 


10659 


FIG.  59. — Shop  blue-print  gummed  to  inside  cover  of  traveler.     Approx- 
imately 6X8  in. 


dirty,  nor  are  they  as  likely  to  become  lost,  as  would  be  the  case 
without  the  use  of  the  envelope. 

Fig.  59  shows  a  shop  detail  blue-print  as  used  by  the  Lodge 
&  Shipley  Machine  Tool  Co.,  and  pasted  into  each  shop  "  traveler- 
book"  along  a  gummed  edge  on  the  inside  of  the  cover.  The 
" traveler-book"  contains  a  number  of  slips  bound  together  in 
proper  consecutive  order,  each  slip  being  a  work  order  for  a 
specific  operation,  and  serving  when  torn  out  and  clock-stamped, 
as  a  record  of  the  workman's  time  on  that  operation.  The  size 
of  this  blue-print  is  approximately  6  in.  by  8  in.,  so  that  when 


166     FACTORY  ORGANIZATION  AND  ADMINISTRATION 

the  8-in.  length  is  folded  in  half  it  fits  standard  filing  devices  for 
4-in.  by  6-in.  cards.     The  "  follower-book "  is  4  in.  by  6  in. 

181.  Specifying   Limits    of   Accuracy. — Each    drafting   room 
should  agree  with  the  proper  shop  authorities  on  a  standard 


FERRACUTE  MACHINE  CO.    PIECE  NAME..CE_^T??i.^A'I?.:.i?9AL.?.:^....P.IECE  SYMBOL     AN  I3ai3__. 


CUSTOMER    Fenwiok  Freres 


ATERIAL        1.0. 


WEIGHT,   ROUGH 


WEIGHT,  FINISHED 


DESIGNER       O.Bmith 


rsMAN    C.Tajlor 


APPKOVED       L.C.M. 


12800-C 


FIG.  60. — Shop  blue  print  specifying  limits  of  accuracy.  Red  cross-section 
lines  as  well  as  black  border  and  printed  matter  at  bottom  of  sheet  are  printed 
on  the  standard  size  tracing  sheets. 

table  of  ordinary  clearances  to  be  used  in  machine-tool  work, 
and  all  machinists  should  be  furnished  with  a  table  specifying 
these  clearances.  Standards  should  be  agreed  on  for  drive,  press, 
or  shrink  fits,  running  fits,  and  special  fits  peculiar  to  certain 
products. 


THE  DRAFTING  DEPARTMENT  167 

In  order  that  there  may  be  no  mistake  as  to  clearances  and 
tolerances  it  is  well  to  specify  them  not  only  on  tables,  but  also 
on  shop  blue-prints. 

Fig.  60  shows  a  blue-print  as  used  by  Frederic  A.  Parkhurst 
at  the  Ferracute  Machine  Co.,  showing  proper  fits. 

182.  Making  and  Issuing  Blue-prints. — For  printing  purposes 
the  cylindrical  arc  light  printing  machine  is  the  most  dependable 
process.     It  is  well  to  provide  sunlight  printing  facilities,  how- 
ever, for  emergency  use.     An  outdoor  platform  or  balcony  on 
to  which  trucks  containing  the  printing  frames  can  be  run,  and 
set  so  that  the  frame  may  be  tilted  in  any  direction,  will  be  found 
much  more  convenient  than  the  usual  method  of  running  tracks 
out  of  a  window  to  hold  the  truck  supporting  the  frame. 

Facilities  should  be  provided  in  every  first-class  drafting  room 
for  photographic  development  and  printing. 

It  is  desirable  to  post  all  requisitions  for  blue-prints  received 
from  various  departments  and  individuals  on  to  a  permanent 
record,  in  which  a  separate  card  is  used  for  each  tracing.  On 
this  card  will  be  recorded  the  date  on  which  any  print  was  issued, 
and  to  whom  it  was  issued.  This  record  serves  not  only  as  a 
check  on  what  persons  received  blue-prints,  but  is  also  a  guide 
as  to  how  large  a  stock  of  prints  of  each  tracing  should  be  carried 
on  hand  ready  for  issuance. 

It  is  important  that  the  recording  and  clerical  part  of  a  draft- 
ing department  be  kept  in  excellent  order. 

183.  Checking   Drawings. — The    checking   work   should   not 
be  delegated  to  the  chief  draftsmen,  but  should  be  the  duty  of 
one  man,  whose  first  duty  it  must  be.     He  should  check  not  only 
from  the  standpoint  of  dimensions,  but  from  a  standpoint  of 
ease  of  processing.     The  policy  of  standardization  should  always 
be  borne  in  mind.     The  drafting  department  must  be  supplied 
with  as  many  lists  as  may  be  necessary  of  the  shop's  standards 
as  to  reamers,  taps,  etc.     Designing  should  always  be  done  in 
such  a  way  as  to  consider  cheapest  and  most  efficient  methods 
of  machining,  assembling,  and  processing  in  general. 

There  should  be  a  system  of  collecting  and  recording  all  criti- 
cisms of  drawings  made  in  machining,  assembling,  or  erecting 
departments.  Where  there  is  any  discrepancy  apparent  in  the 
drawing  the  best  rule  is  that  work  should  be  stopped  and  the 
drawing  taken  at  once  to  the  drawing  room  for  correction  or 
interpretation. 


168     FACTORY  ORGANIZATION  AND  ADMINISTRATION 

184.  Time-cards  in  Drafting  Department. — Time-cards  should 
be  turned  in  by  draftsmen  to  show  the  relative  cost  of  drawings. 
A  record  of  the  results  of  these  time-cards  should  be  kept  not 
only  in  the  cost  department,  but  also  in  the  drafting  department, 
so  that  the  head  of  the  drafting  department  may  have  some  knowl- 
edge of  costs  of  drafting  work  based  on  actual  records  of  perform- 
ance.    Not  only  the  order  number  should  be  recorded  on  the  time- 
tickets,  but  also  the  nature  of  the  drawing,  its   number,  and 
whether  the  work  done  was  designing,  sketching,  tracing,  etc. 
Standing  non-productive  orders  should  be  issued,  to  be  closed 
monthly,  to  determine  the  cost  per  month  of  filing,  blue-printing, 
and  other  maintenance  expense  of  the  drafting  department. 

185.  Chief  Draftsman. — The    head  of   the    drafting    depart- 
ment needs  to  be  relieved  of  as  much  routine  work  as  possible, 
outside  of  that  connected  with  the  time  at  which  drawings  for 
certain  orders  should  be  completed.     In  this  respect  he  should  be 
as  thoroughly  posted  as  the  head  of  the  shop  production  depart- 
ment.    He  should  be  provided  with  a  list  of  all  orders  for  which 
drawings  are  required,  and  also  a  complete  list  of  all   draw- 
ings which  have  to  be  made,  together  with  the  date  at  which  they 
are  to  be  ready.     He  should  hold  department  meetings  and  con- 
sultations at  stated  times,  in  order  to  have  the  output  of  his 
department  correspond  as  nearly  as  possible  to  the  requirements 
of  the  business. 

The  head  of  the  drafting  department  should  be  a  man  with 
knowledge  of  machinery  used  in  his  line  of  work,  and  of  the  best 
methods  of  foundry  and  machine-shop  practice  in  general.  He 
should  be  constantly  going  over  current  product  with  a  view  of 
having  ready  plans  for  redesigning,  to  be  put  into  effect  the  mo- 
ment the  policy  of  the  company  as  to  adhering  to  standards  once 
established  will  permit  of  putting  the  improvement  into  effect. 

REFERENCES 

PERRIGO:  "Modern  Machine-shop  Construction,  Equipment  and  Man- 
agement," Chapter  XIX. 

CARPENTER:  "Profit  Making  Management,"  Chapter  IV. 
PARKHURST:  "Applied  Methods  of  Scientific  Management,"  pp.  27-36. 


CHAPTER  XIV 
THE  PATTERN  DEPARTMENT 

186.  Orders  to  Make  Patterns. — Orders  to  make  new  patterns 
usually  come  direct  from  the  drafting  department  or  the  bill  of 
material  department  to  the  pattern-making  department,  in  case 
the  factory  has  its  own  pattern-making  department.  If  patterns 
are  not  made  in  the  factory,  but  are  bought  outside  from  a  jobbing 
pattern  shop,  then  the  shop  order  will  be  replaced  by  a  requisition 
on  the  purchasing  department  or  a  request  on  the  stores  depart- 
ment to  make  a  requisition  on  the  purchasing  department. 

Fig.  61  is  a  form  for  an  order  to  make  a  pattern  in  the  shop. 


PATTERN  DEP'T.  PATTERN  NO, 

/    NEW  WORK. 
Job  Order  for  jQr  Special  Work> 

Report  all  materials  used  on  back  hereof.  On  completion  of 

•work  the  Foreman  will  date,  sign  and  return  this  Order  to  General 
Office.  Foreman  will  see  that  all  Time  Slips  are  marked  for  the  above 
Pattern  No.  only.  If  Pattern  No.  is  not  given  then  mark  Time  Slip 
for  Order  No.  below. 


Drawing  or  Sketch  Nc 


-ORDER  NO.. 


FIG.  61. — Form  for  pattern  order.     Manila  card,  5  inches  wide,  3  inches 

high. 

The  pattern-making  department  is  furnished  one  copy  of  this 
order.  Another  copy  is  sent  to  the  cost  department.  The 
amount  of  material  used  is  posted  by  the  pattern-maker  or  the 
foreman  of  the  pattern-making  department  on  the  back  of  this 
order  card.  Fig.  62  shows  the  back  of  the  card  as  used  for 
reporting  materials  consumed  in  making  the  pattern.  When  the 
pattern  is  completed,  it  is  sent  with  the  order  card  to  the  pattern 
storage  department,  where  the  pattern  storage  clerk  records  it 
in  his  record  of  patterns,  and  assigns  it  a  place  in  the  storage 

169 


170     FACTORY  ORGANIZATION  AND  ADMINISTRATION 


vault  or  building.  The  pattern  storage  clerk  fills  out  a  record 
similar  to  Fig.  63,  which  describes  the  pattern,  shows  where  it 
is  located  in  the  pattern  storage  racks,  and  he  then  sends  the  order 


MATERIALS    USED. 

State  No.  of  feet  of  lumber  of  each  grade  for  pattern,  its  loose 
pieces,  core  boxes,  etc.,  draw  plates,  letters,  figures,  etc.,  etc. 

Lum 

Patte 
Draw 

ber-ist  grade,  fret,  h.m. 

2nd     «         «         « 

Common       it         ft 

of  Plate  

Plates;  No.  user!                                                                        p?t    \Tr> 

FIG.  62. — Reverse  of  form  shown  in  Fig.  37.     Pattern-maker's  report  of 
material  used  on  an  order.     Manila  card,  5  inches  wide,  3  inches  high. 

on  to  the  cost  department,  showing  that  he  has  received  the  com- 
pleted new  pattern. 

187.  Time-keeping  System  in  Pattern  Shop. — It  is  sometimes 
desirable  to  have  the  time-keeping  system  in  the  pattern  depart- 
ment different  from  the  general  time-keeping  system,  as  the 


PATTERN  NO. 


DRAWING  NO. 


WHEN  MADE 


FIG.  63. — Pattern  storage  record.     White  card,  5  inches  wide,  3  inches  high. 

department  is  apt  to  be  a  small  one,  and  in  an  isolated  location 
some  distance  away  from  larger  shop  departments  where  a  differ- 
ent time-keeping  system  may.be  preferable.  There  will  always 
be  more  or  less  repair  work  on  patterns  and  flasks  going  on  in  the 


THE  PATTERN  DEPARTMENT 


171 


pattern-making  department,  which  fact  will  be  a  reason  for  the 
over-head  or  operating  expense  rate  of  the  pattern  shop  being 
quite  heavy.  Fig.  64  shows  a  time-card  to  be  filled  out  by  each 
pattern-maker,  which  provides  spaces  for  filling  in  the  pattern- 
maker's non-productive  time.  The  pattern-making  foreman  will 


NAME 

ri  nr.K  No. 

TOTAL  HOUR 

=; 

FLASK    A.    PATTERN 

No.  OF 
HOURS 

DESCRIPTION  OF  WORK. 

1 

Making  New  Wooden  Flasks. 

0 

Repairing  or  Replacing  Old  Flasks. 

3 

Handling  Flask  Lumber  and  Supplfes*.. 

4 

H         Pattern         «<                    u 

Pattern  No. 

«          it 

«          « 

, 

n          it 

New  Patterns  for                     "Pipe  fipeciate. 

u             it            it                               a             it 

5 

Repairing  or  Replacing  Old  Patterns 

fi 

Carrying  Patterns. 

7 

Cleaning  Shop  and  General  Labor. 

a 

General  Helping  at  Flasks. 

9 

«             «              Patterns. 

DROP  IN 

ro  i 

IME  BOX  EVERY  DAY  AT  QUITTING  TIME. 

FIG.  64. — Time-card  for  pattern-maker.     Manila  card,  3  1/2  inches  wide, 

6  inches  high. 

have  to  spend  some  time  in  looking  over  these  time-cards,  to  see 
that  the  time  is  correctly  distributed. 

188.  Recalling  or  Altering  Patterns. — Where  an  establishment 
gets  its  castings  from  a  number  of  different  foundries,  as  is  very 
often  the  case  in  a  concern  using  many  steel  castings,  the  matter 
of  recalling  or  altering  patterns  is  one  which  will  involve  con- 
sideration of  a  number  of  questions  affecting  production.  These 


172     FACTORY  ORGANIZATION  AND  ADMINISTRATION 


considerations  are  fully  set  forth  in  the  form  shown  in  Fig.  65, 
which  is  a  request  to  recall  or  alter  a  pattern.  This  request 
emanates  from  the  drafting  department,  which  states  the  nature 
of  the  change  or  the  reason  for  the  recall,  and  also  states  whether 
the  change  will  affect  interchangeability  and  how.  The  form  next 
goes  to  the  purchasing  department,  which  department,  in  the 
establishment  in  which  this  particular  form  was  used,  had 


REQUEST   TO    RECALL    OR    ALTER 

PATTERN 

Date 

T.o  Purchasing  Dept. 

Pattern  NO.                                                                "Mark   Nn_ 

Ah«vo  Pattern  is  to  be 

Will  change  affect  interchangeability 
of  castings  as  previously  .made?  If  so  how? 

FOLLOWING  TO  BE  FILLED  BY  PURCHASING  DEPT.: 
No.  castings  fiom  present  pattern  now  i>  stock 

For  Drafting  Department 

No.  finished  parts  from  ««         ««          •«      «»      «« 

No.  castines  due  from  present  pattern 

No.  castings  required  for  production  orders 

No.  finished  parts  shipped  in  preceding  6  months 

SUPERINTENDENT  TO  FILL  FOLLOWING: 

Shall  current  foundry  orders  be  filled 
before  recalling  pattern 

For  Purchasing  Department 

Shall  any  additional  castings  from  present 
pattern  be  ordered  before  recalling  pattern-? 

Pattern  Recalled:  Date 

Superintendent 

When  completely  disposed  of  Purchasing  Department 
will  return  this  form  to  Drafting  Department 

Purchasing  Agent 

FIG.  65. — Authorization  for  pattern  changes  or  recall, 
inches  wide,  11  inches  high. 


White  paper,   9 


charge  of  the  pattern  storage  department.  The  purchasing  de- 
partment looks  up  the  stores  records,  and  fills  out  the  blanks, 
specifying  the  number  of  castings  from  present  pattern  now  in 
stock,  the  number  of  finished  parts  from  present  pattern  now  in 
stock,  the  number  of  castings  required  for  production  orders,  and 
the  number  of  finished  parts  shipped  in  preceding  six  months. 
When  the  purchasing  department  has  filled  in  this  information, 


THE  PATTERN  DEPARTMENT 


173 


the  form  is  sent  to  the  superintendent,  who  answers  the  questions, 
"Shall  current  foundry  orders  be  filled  before  recalling  pattern?'* 


RECEIVING    DEPT.  TO  ATTACH  ONE  OFTHESE 
TAGS  TO  EVERY  PATTERN  RECEIVED. 

DATE  PATTERN  RECD. 

FROM   _ 

KIND  OF  PAT. NO.  CORE  BOXES 

DATE  OF  NOTIFICATION _. „ 

BY _ 

TO  BE  FILLED  BY  DRAFTSMAN: 
DATE  AND  HOUR  CHECKED _, 

IS  PATTERN  TO  BE    REPAIR!D?- — 

CHECKED  BY__. 

TO  BE  FILLED  BY  PURCHASING  DEPT. 
SHIP  TO 

DATE 

TO  BE  FILLED  BYSHIPPING  DEPT. 
DATE  AND  HOUR  RECVD __ 

DATE  SHIPPED 

DETACH  AND  HANDTO  RECVG.   DEPT.  WHEN 
PATTERN   IS  SHIPPED. 

TO  BE  FILLED  BY  PATTERN  STORE  MAN! 

DATE  RECVD. _._ 

STORED  IN  BIN  NO. 

BY. 

DETACH  AND  HANDTO  PURCHASING  DEPT. 
WHEN    PATTERN   IS   STORED. 


FIG.  66. — Pattern  tag  attached  by  receiving  department,  giving  record  of 
disposition  and  finally  filed  in  purchasing  department  to  show  location  of 
pattern.  Manila  tag  stock  with  reinforced  eyelet,  3  1/8  inches  wide,  6  1/2 
inches  high. 

and  "  Shall  any  additional  castings  from  present  pattern  be  or- 
dered before  recalling  pattern?" 

This  method  puts  the  responsibility  of  tying  up  production 


174    FACTORY  ORGANIZATION  AND  ADMINISTRATION 

on  the  shop  superintendent,  and  relieves  the  drafting  department 
of  any  authority  to  hold  up  delivery  of  castings  by  reason  of 
changes  in  patterns. 

189.  Checking  Patterns  and  Recording  Their  Travel  and  Loca- 
tion.— Where  patterns  are  continually  coming  in  and  going  out 
from  and  to  various  foundries,  a  pattern  tag,  similar  to  Fig.  66, 
will  be  found  very  useful.  This  pattern  tag  is  attached  by  the  re- 
ceiving department  to  every  pattern  received.  The  receiving 
department  fills  in  the  first  section  of  the  tag,  which  designates 
the  pattern  number,  the  date  the  pattern  was  received,  from 
whom  it  was  received,  the  kind  of  pattern,  the  number  of  core- 
boxes,  and  the  date  on  which  the  receiving  department  notified  the 
drafting  and  purchasing  departments  of  the  receipt  of  the  pattern. 

As  soon  as  the  drafting  department  receives  notice  from  the 
receiving  department  that  a  pattern  is  in  (such  notice  being  on  a 
separate  notification  slip  shown  in  Fig.  134),  a  representative  of 
the  drafting  department  is  sent  to  check  the  pattern.  The  drafts- 
man fills  in  the  result  of  his  checking  on  the  tag  in  the  second 
space,  specifying  whether  the  pattern  needs  to  be  changed  or 
repaired.  The  purchasing  department  next  sends  a  representa- 
tive to  the  pattern,  or  better,  a  representative  from  the  purchasing 
department  makes  daily  visits  to  the  receiving  department  and 
fills  in  the  third  space  on  the  tag  designating  where  the  pattern  is 
to  be  shipped.  If  it  is  to  go  to  pattern  storage,  he  so  designates 
in  the  space.  The  next  space  is  for  the  shipping  department  to 
fill  in  in  case  the  pattern  is  to  be  shipped  out.  The  shipping 
department  then  sends  the  tag  to  the  purchasing  department. 
If  the  pattern,  instead  of  having  to  be  shipped  out,  is  to  go  to 
pattern  storage,  the  shipping  department  space  is  left  blank, 
and  the  pattern  storage  man  fills  in  the  last  space,  designating 
when  he  received  the  pattern  and  where  he  has  stored  it. 

The  tags  as  returned  to  the  purchasing  department  are  there 
filed,  according  to  numbers,  in  two  boxes,  one  box  representing 
patterns  out  at  various  foundries,  the  other  box  representing 
patterns  in  the  storage  department  at  the  shop.  This  enables 
the  purchasing  department  to  state  the  location  of  any  pattern 
in  current  use  at  a  moment's  notice. 

REFERENCE 

PERRIGO:  "Modern  Machine-shop  Construction,  Equipment  and  Man- 
agement," Chapter  XXX. 


CHAPTER  XV 
THE  PURCHASING  DEPARTMENT 

190.  Functions  of  Purchasing  Department.— The  functions  of 
the  purchasing  department  in  a  manufacturing  establishment  may 
be  stated  as  follows: 

First. — To  secure  the  most  satisfactory  material,  such  material 
including  raw  and  finished  material  required  in  the  manu- 
facturing processes,  equipment,  and  general  supplies. 

Second. — To  secure  the  most  desirable  delivery  of  the  material, 
keeping  complete  and  accurate  record  of  all  unfilled  purchase 
orders.  Deliveries  and  mistakes  must  be  kept  account  of. 

Third. — To  obtain  the  best  terms  of  payment  and  the  lowest 
prices. 

Fourth. — To  record  and  classify  all  materials,  equipment,  and 
supplies  used  by  the  establishment,  list  for  easy  reference  the 
names  of  all  firms  supplying  these  goods,  and  all  purchases  made. 
The  order  in  which  the  above  functions  have  been  mentioned  is 
usually  the  order  of  their  relative  importance. 

191.  Qualifications    of    Purchasing    Agent— The    successful 
accomplishment  of  the  first  function  demands  that  the  pur- 
chasing agent  shall  be  a  man  who  has  a  working  knowledge  of 
the  particular  industry  for  which  he  is  to  buy  material.     If 
he  has  in  addition  a  knowledge  of  the  fundamental  principles  of 
the  resistance  of  materials,  of  metallurgy,  and  of  machinery,  so 
much  the  better,  for  he  will  be  able  to  make  practical  application 
of  such  knowledge. 

That  the  purchasing  agent  be  the  possessor  of  practical  manu- 
facturing knowledge  is  just  as  essential  in  an  establishment  which 
refers  its  tests  of  materials  to  a  testing  laboratory,  or  to  its  engi- 
neering department  or  superintendent,  as  in  a  smaller  establish- 
ment which  does  not  conduct  such  tests.  If  care  is  exercised 
to  obtain  a  man  of  the  qualifications  indicated  to  fill  the  position 
of  purchasing  agent,  there  will  be  far  less  liability  to  the  error, 
frequently  made,  of  buying  material  good  enough  in  itself,  but 
not  exactly  adapted  to  the  particular  purpose  for  which  it  is 
desired. 

175 


176     FACTORY  ORGANIZATION  AND  ADMINISTRATION 

It  is  assumed  at  the  outset,  that  persons  other  than  the  pur- 
chasing agent  will  have  specified  the  exact  physical  or  chemical 
properties  of  the  articles  that  are  the  most  important  constitu- 
ents of  the  manufacturing  product  of  the  establishment.  But 
there  is  no  manufacturing  process  so  simple  that  it  does  not 
require  the  purchase  of  a  great  variety  of  minor  articles,  the 
examination  of  each  one  of  which  by  the  engineering  department 
would  be  a  useless  burden.  And  it  is  here,  as  well  as  in  the  pur- 
chase of  general  supplies,  that  the  purchasing  agent's  training  and 
experience  come  into  active  play. 

To  salesmen,  the  ignorant,  affable  young  clerk  who  has  been 
promoted  to  the  position  of  purchasing  agent  is  a  familiar  type. 
He  is  frequently  the  cause  of  a  salesman's  prolonging  his  stay  in  a 
city  several  days,  until  finally  he  sees  the  man  with  whom  he  can 
have  an  intelligent  conversation.  It  is  quite  evident  that,  where 
this  is  the  case,  the  young  man  is  a  hindrance  from  an  economic 
standpoint,  since  the  additional  cost  of  sales  departments  on 
account  of  prolonged  stays  is  sufficient  to  increase  materially  the 
unnecessary  expense  connected  with  the  placing  of  an  article  on 
the  market. 

The  securing  of  the  most  desirable  delivery  involves  a  knowledge 
of  business  methods  and  forms,  in  which,  unfortunately,  purely 
technical  or  shop  men  have  generally  had  but  little  training  •  and 
this  fact  is  the  excuse  for  the  common  practice  of  appointing  as 
purchasing  agents,  clerks  who  have  had  but  little  technical  or 
shop  knowledge. 

A  thoroughly  systematic  conduct  of  the  purchasing  office,  such 
as  is  absolutely  essential  to  insure  the  proper  attention  to  this 
very  important  matter  of  delivery,  is  much  facilitated  by  the  use 
of  certain  forms.  Some  examples  will  be  cited  of  such  forms, 
which  must,  however,  be  modified  to  suit  the  requirements  of  any 
particular  case. 

192.  Requisitions  on  Purchasing  Department. — It  is  very 
customary  for  other  departments  to  lay  the  blame  for  delays  in 
manufacture  upon  delays  in  receipt  of  material.  Hence  it  is 
important  that  a  written  record  be  kept  showing  the  originating 
dates  of  all  calls  for  materials.  In  many  establishments  the  first 
step  in  connection  with  the  making  out  of  a  bill  of  material  is  the 
issuing  of  the  requisitions  for  such  material  as  it  is  known  must  be 
purchased. 

The  purchasing  department  should  be  supplied  by  the  general 


THE  PURCHASING  DEPARTMENT 


177 


manager  with  a  list  of  all  departments  authorized  to  make  requi- 
sitions direct  on  the  purchasing  agent,  together  with  a  statement 
as  to  the  nature  of  goods  for  which  such  department  may  make 
requisition.  For  instance,  it  is  usually  desirable  to  confine  the 


ORDER    ON    STORE-ROOM 

THIS  REQUISITION  WILL  NOT  BE  ACCEPTED  IF 
CHARGED  TO  MORE  THAN  ONE  ORDER  OR  IFORDER  NO. 
IS  OMITTED,  OR  IF  NOT  SIGNED  BY  FOREMAN. 

ORDER  NO. 

QUAN- 
TITY 

MARK   NO. 
OFT  SIZE 

NAME   OF   MATERIAL 

WEIGHT 

FOREMAN'S  SIGNATURE 

DATE 

FIG.  67. — Order  on  storeroom  used  to  authorize  withdrawal  of  supplies 
and  components  not  issued  with  regular  production  tags.  Yell6w  bond 
paper,  3  inches  wide,  5  inches  high. 

making  of  requisitions  for  equipment  to  a  certain  department, 
making  of  requisitions  for  materials  to  certain  other  departments, 
the  making  of  requisitions  for  general  supplies  to  another  depart- 
ment, etc.  Hence  separate  series  of  requisitions  are  useful,  desig- 


STORE-ROOM  CREDIT 

ORDER   NUMBER 

MADE  OUT  BY 

DATE 

ACCEPTED 

FIG.  68. — Storeroom  credit.  Turned  in  to  storeroom  with  unused  sup- 
plies, bulk  material,  bar  or  sheet  stock  of  which  only  a  portion  has  been  used 
on  a  given  order.  Pink  bond  paper,  three  inches  wide,  5  inches  high. 

nated  by  different  prefix  letters  and  printed  on  different  colors  of 
paper.  It  is  not  desirable  to  permit  shop  foremen  to  make  requi- 
sitions direct  on  the  purchasing  agent.  They  should  make 
requisitions  on  the  storeroom  for  such  materials  or  supplies  as 

12 


178     FACTORY  ORGANIZATION  AND  ADMINISTRATION 


they  need,  such  requisitions  being  usually  called  "  Order  on  Store- 
room," and  bearing  the  order  number  of  either  productive  or 
non-productive  series  to  which  the  items  are  to  be  charged. 
Usually  small  tools  are  reported  on  a  separate  form  or  "  Order 
on  Tool-room,"  to  cover  withdrawals  of  new  tools,  such  as  files, 
drills,  etc.  Fig.  67  shows  a  form  for  "  Order  on  Storeroom," 
and  Fig.  68  a  form  for  credit-slip  to  be  used  in  returning  excess 
material,  such  as  bar  stock  of  steel  or  brass  after  having  cut  off 
a  piece.  Where  a  production  department  exists,  which  sees  that 
the  necessary  material  is  provided  for  all  production  orders 


ORIGINAL. 

SPECIAL   REQUISITION              R...N..50355 

TO  pupc-«»«inr.  nrp-r                                         OATC    ._    ..              PURCHASING  nnnrn  Mr, 

ORDER  THE   FOLLOWING  MATCRIAl    FROM 

QUANTITY 

DESCRIPTION 

«PP«OVI 

FIG.  69. — Form  for  requisition  on  purchasing  agents.     White  bond  paper, 
8  inches  wide,  5  5/8  inches  high. 

and  delivered  to  the  shop  when  the  order  is  ready  to  have  work 
begin  on  it,  the  orders  on  stores  will  have  a  tendency  to  narrow 
themselves  down  to  factory  supplies  and  tools.  They  may  also 
serve  as  requests  for  delayed  material.  When  used  for  this  pur- 
pose they  must  be  distinguished  in  some  way  from  the  other  store- 
room orders  so  as  to  avoid  posting  them  by  mistake  as  store- 
room withdrawals. 

Fig.  69  shows  a  form  for  requisition  on  purchasing  agent. 
This  is  usually  best  written  in  triplicate.  In  departments  that 
have  to  write  a  good  many  requisitions,  the  autographic  register 


THE  PURCHASING  DEPARTMENT  179 

is  frequently  found  useful  in  writing,  viz.,  a  machine  in  which 
the  paper  is  fed  in  rolls  and  the  carbon  is  fed  crosswise  as  it  wears 
out.  The  original  is  sent  to  the  purchasing  department,  as  is 
also  the  duplicate,  the  triplicate  being  kept  on  file.  When  the 
purchasing  department  has  filled  in  the  purchasing  order  number, 
the  duplicate  is  returned  to  the  department  in  which  the  requisi- 
tion originated. 

In  making  requisitions  and  purchase  orders  for  castings  it  will 
be  found  most  satisfactory  to  issue  a  separate  requisition  and 
separate  purchase  order  for  each  separate  pattern  number.  At 
first  sight  this  would  seem  like  a  great  many  useless  orders,  but 
experience  has  demonstrated  that  partial  deliveries  are  far  more 
easily  checked  off  on  an  order  referring  to  castings  from  but  a 


• 

OUTWARD    ORDE 

.R    No 

GENT 

IN  CAF 
VIA. 

PLEASE  SHIPTO 
IE  OF                                                                                    THE  FOLLOWING  MATER 

ALS,   ALL  DELIVERED 
3F 

(voyq  QUOTATION  < 

F.O.B. 

CAR!?                                                                      .    PRICE     $ 

NOTE 

ACKNOWLEDGE,  GIVING  PROBALE  DATE  OF  SHIPMENT.        \     r\\lf    ORDTR    NUMBER 

NO  ALLOWANCE  FOR  BOXING,   PACKING  OR  CARTAGE.      ^       ON  ALL  CORRESPONDENCE 
WE  DEDUCT  FREIGHT  ON  DEFECTIVE  MATERIAL.             /                   AND  INVOICES. 

FIG.  70. — Form  for  purchase  order.     White  bond  paper,  81/2  inches  wide, 

11  inches  high. 

single  pattern  than  if  a  given  order  carries  partial  deliveries  on  a 
variety  of  patterns.  It  also  enables  one  to  remove  at  once  all 
orders  for  castings  from  a  given  pattern  as  soon  as  the  deliveries 
on  that  pattern  are  completed. 

193.  Purchasing  Department  Order  Form. — As  to  the  form 
of  the  purchase  order  itself,  there  are  still  a  good  many  houses 
using  the  old-style  bound  book  of  orders  with  stubs,  for  the  reason 
that  then  there  is  one  place  where  there  is  a  bound  set  of  all  orders. 
This  method  necessitates  the  writing  of  an  index  book.  The 
more  general  method  is  to  typewrite  all  copies,  there  being  usually 
at  least  three,  filing  one  set  of  carbon  copies  alphabetically,  and 
the  other  serially  by  numbers.  A  further  reference  file  is  a  large 
card  index  arranged  alphabetically  bp  materials,  and  so  ruled 
as  to  allow  the  entering  of  all  purchase  orders  for  a  given  kind 


180     FACTORY  ORGANIZATION  AND  ADMINISTRATION 

and  size  of  material,  and  with  spaces  permitting  of  partial  de- 
liveries. Such  a  large  card  record  serves  as  an  entry  record  of 
all  invoices,  and  also  for  all  prices  paid  for  a  given  article,  as  well 
as  a  guide  to  the  time  that  was  taken  to  make  delivery  after  orders 
were  placed. 

Fig.  70  is  a  form  for  purchase  order.  On  the  bottom  of  the 
sheet  are  printed  the  terms  on  which  the  order  is  placed.  From 
a  legal  standpoint  it  is  usually  best  to  place  these  terms  between 
the  name  and  address  at  the  head  of  the  order  and  the  body  of  the 
order  itself,  thus  making  the  terms  form  an  integral  part  of  the 
communication. 

An  additional  carbon  copy  of  the  purchase  order  is  usually 
sent  to  the  receiving  department.  Some  firms  prefer  to  send 
a  notice  to  the  receiving  department  which  does  not  specify  the 
quantity  called  for,  so  as  to  insure  the  actual  counting  of  goods 
delivered  on  the  part  of  the  receiving  department. 

194.  Following  up  Deliveries.— The  Shannon  type  of  prong  file 
or  a  loose  leaf  binder  is  usually  used  for  filing  the  copies  of  pur- 
chase orders.  If  a  firm  has  a  great  many  purchase  orders,  extra 
long  prongs  may  be  used  on  the  files,  and  a  number  of  different 
sets  of  boards  may  be  used,  each  file-board  containing  only  a  part 
of  the  entire  series.  As  soon  as  a  purchase  order  has  been  com- 
pleted, it  is  taken  off  the  file-boards  containing  uncompleted 
orders,  and  transferred  to  the  file-boards  of  filled  orders.  Some 
firms  attach  one  of  the  copies  of  the  completed  purchase  order, 
together  with  the  requisition,  to  the  voucher.  This  system 
involves  some  complications  when  invoices  are  approved  which 
cover  only  partial  deliveries  on  a  given  purchase  order.  In  such 
cases  extra  copies  may  have  to  be  typewritten  of  the  purchase 
order  and  the  requisition,  for  the  purpose  of  attaching  to  the 
voucher,  the  originals  remaining  on  file  until  the  last  delivery 
on  the  order  has  been  made. 

Where  a  factory  has  a  number  of  departments  to  which  pur- 
chased articles  have  to  be  delivered,  the  copy  of  the  purchase 
order  which  is  sent  to  the  receiving  department  should  bear  a 
notation  stating  to  which  department  the  goods  are  to  be  deliv- 
ered, also  the  requisition  number  which  it  fills. 

A  simple  method  of  securing  promises  of  delivery  is  to  enclose 
a  printed  post-card  acknowledgment  of  order,  with  blank  for 
promise  of  delivery.  Fig.  71  shows  a  form  of  such  post-card 
promise.  To  keep  track  of  promises  it  is  very  convenient  to  have 


THE  PURCHASING  DEPARTMENT 


181 


a  set  of  thirty-one  pigeon-holes,  each  pigeon-hole  representing  a 
day  of  the  month,  and  each  hole  containing  the  postal  cards  or 
other  memoranda  of  all  shipments  which  should  arrive  on  that 
day.  This  file  affords  a  systematic  method  of  stirring  up  delin- 
quent shippers,  the  additional  promises  being  noted  on  the  mem- 
oranda as  they  are  transferred  from  one  pigeon-hole  to  another. 
Where  an  establishment  is  located  in  a  large  city,  and  many 
orders  are  local,  it  is  best  to  separate  the  city  orders  from  the 
others,  so  that  they  can  be  followed  up  by  telephone  instead  of 
by  mail.  For  this  purpose  it  may  be  well  to  have  a  separate 
series  of  purchase  orders  for  local  use,  distinguishing  them  by 
some  convenient  prefix  letter. 


GENTLEMEN: 

WE  CALL  YOUR  ATTENTION  TO  OUR  ORDER  No. 


CALLING  FOR- 


PLEASE  ADVISE  WHEN   SHIPMENT  WILL  BE    MADE,  ON  THIS 
CARD,   RETURNING  SAMETO  US. 


YOURS   VERY  TRULY, 


FIG.  71. — Return  post-card  for  promise  date  of  shipment  of  purchase  order, 
51/2  inches  wide,  31/4  inches  high. 

195.  Securing  Favorable  Terms. — As  to  the  third  function 
of  the  purchasing  department  which  was  mentioned,  namely, 
that  of  securing  good  terms  and  low  prices,  much  depends  on 
the  shrewdness 'and  tact  of  the  purchasing  agent.  Courteous 
attention  to  salesmen  is  always  desirable,  and  can  be  accorded 
without  loss  of  time,  if  nothing  but  strictly  business  conversation 
is  indulged  in. 

The  mere  request  for  a  little  more  liberal  cash  discount  than 
is  usually  given  will  frequently  result  in  its  being  allowed,  and  the 
same  is  true  of  securing  deferred  payments,  where  they  are  de- 
sired. The  cash-discount  system,  if  applied  to  all  purchases, 
however  small,  will  result  in  a  considerable  annual  saving.  It  is 
well  worth  remembering  that  cash  discounts  are  obtainable  on 
small  amounts  as  well  as  large. 


182     FACTORY  ORGANIZATION  AND  ADMINISTRATION 

196.  Recording  and  Classifying  Material,  Equipment,  and 
Supplies^ — The  fourth  function,  that  of  recording  and  classifying 
all  materials,  equipment,  and  supplies  used  by  the  company,  and 
knowing  who  the  suppliers  are,  and  what  are  their  prices,  demands 
the  keeping  up  of  several  additional  indexes  and  files.  A  card 
index  of  quotations  and  prices,  arranged  alphabetically  by 
names  of  materials,  with  sub-cards  for  various  sizes,  will  be  found 
desirable.  Sometimes  pocket  editions,  abridged,  of  this  price- 
list,  made  in  alphabetical  pocketbook  form,  will  be  desirable, 
so  that  they  may  be  carried  about  in  the  pocket,  out  of  the  office. 

The  large  card  record  of  invoices  posted  on  material  cards, 
as  already  referred  to,  serves  as  a  record  of  prices  actually  charged 
for  goods  actually  purchased,  as  a  distinct  record  from  the  quo- 


STORFS    RrrOBn. 

ARTICLE 

SIZE 

MATERIAL 

DRAW.  NO. 

UNIT 

MAXIMUM 

MINIMUM 

FLOOR 

ROOM 

RACK 

CASE 

SHELF 

BIN 

DATES  VERIFIED  BY  INVENTORY 

ORD 

ERED 

RECEIVED 

DELIVERED 

IN  STOCK 

ORDERED 

NUMBER 

ORDERED 

INVOICE 

RECEIVED 

RECEIVED 

COST 

ISSUED 

ORDER 

NUMBER 

QUANTITY 
ISSUED 

DATE 

QUANT 
ON    H 

"ITY 
^ND 

VALUE 

.. 

*~ 

»^^_ 

_^—  - 

->  

FIG.  72. — Combined  purchase  order  record.  Invoice  record,  and  stores 
record,  serving  also  as  material  price  catalogue,  for  use  in  small  establish- 
ments. White  card,  6  inches  wide,  4  inches  high,  red  and  blue  ruling. 

tation  and  price  index  just  described.  In  a  small  establishment 
this  invoice  record  may  also  serve  as  a  stores  record.  A  form 
for  such  combined  record  is  shown  in  Fig.  72. 

A  catalogue  cabinet  will  have  to  be  provided  with  card  indexes 
by  class  of  material,  and  by  name  of  supplier.  With  a  double 
index  of  this  sort  it  is  immaterial  in  what  order  the  catalogues 
are  arranged,  an  arrangement  by  size  of  catalogue  being  usually 
the  most  satisfactory. 

197.  Returned  Goods. — Wrong  or  unsatisfactory  goods  must 
be  promptly  returned.  For  this  purpose  a  notice  should  be  sent 
to  the  shipping  department,  and  a  copy  sent  to  the  billing  de- 
partment. Fig.  73  shows  a  convenient  form  for  this  purpose. 

Where  a  considerable  number  of  contracts  are  made  for  mate- 


THE  PURCHASING  DEPARTMENT  183 

rials  and  supplies,  a  separate  contract  file  or  safe  will  be  found 
desirable. 

198.  Freight,  Express  and  Drayage.— Separate  accounts  are 
usually  kept  by  the  purchasing  department  of  such  matters  as 
drayage,  freight,  express,  insurance,  and  other  special  matters, 
as  the  nature  of  the  business  may  require.  In  the  matter  of  dray- 
age, freight,  and  express,  it  is  very  important  that  close  scrutiny 
be  kept  by  the  purchasing  department,  so  as  to  avoid  needlessly 
large  expenses  in  these  directions.  Requisitions  must  be  made  in 
sufficient  time  to  avoid  express  shipments.  Also  the  pur- 


GOODS    RETURNED 


SHIP  TO- 


VIA- 


FOLLOWING   GOODS    FOR   CREDIT 


DATE  CREDIT  MEMO AMOUNT  CREDIT  MEMO.. 

WHY  RETURNED P.  D.  No 

DATE : PER — , 


FIG.  73. — Notice  by  purchasing  department  to  accounting  department  of 
goods  returned  for  credit,  6  inches  wide,  4  inches  high.     Thin  white  paper. 

chasing  department  may  find  it  desirable  to  lump  orders  with  a 
jobbing  supply  house  occasionally,  to  reduce  cost  of  freight  and 
drayage  that  would  be  entailed  by  placing  a  lot  of  small  orders 
with  various  manufacturers,  thus  getting  in  one  package,  and 
with  one  charge  for  freight  and  hauling,  a  lot  of  items  that  might 
make  twenty  or  more  packages  if  bought  direct  from  the  various 
manufacturers,  necessitating  the  paying  of  freight  and  haulage 
on  each  of  the  twenty  packages.  Moreover,  a  jobbing-house  is 
often  apt  to  make  quicker  delivery  on  small  orders  than  the 
manufacturer,  who  will  fill  his  important  orders  first  and  let  the 
minor  orders  wait. 


184     FACTORY  ORGANIZATION  AND  ADMINISTRATION 

199.  Checking  Invoices. — It  is  the  duty  of  the  purchasing  de- 
partment to  check  invoices  as  to  correctness  of  quantity  and  price. 
Invoices  should  not  be  sent  to  the  receiving  department  to  check, 
but  should  be  kept  in  the  purchasing  department.  A  record 
book  should  be  kept  of  all  invoices  received,  showing  date  received, 
and  when  and  to  whom  they  were  sent. 

In  some  establishments  it  is  very  desirable  that  the  purchas- 
ing department  make  a  daily  estimate  of  the  value  of  all  goods 
ordered  during  that  day,  or  rather  during  the  previous  day,  with 
estimated  dates  at  which  payments  will  become  due. 

REFERENCES 

GOING:  "Principles  of  Industrial  Engineering,"  Chapter  IX. 
ENNIS:  "Works  Management,"  Chapter  V. 
BRISCO:  "Economics  of  Business,"  Chapter  X, 
COOK:  "Factory  Management,"  Chapter  III. 
RINDSFOOS:  "Purchasing." 
TWYFORD:  "Purchasing." 


I 


CHAPTER  XVI 
STORES  AND  STOCK  DEPARTMENT 

200.  Classification  of  Materials. — After  the  bill  of  material 
has  been  prepared,  and  the  necessary  drawings  and  patterns 
have  been  provided  for,  the  next  steps  in  the  manufacturing 
process  are  those  dealing  with  the  getting  in  of  the  materials  of 
construction  and  the  making  of  the  finished  parts  in  the  shop. 

Raw  materials  purchased  outside,  and  which  have  to  have 
work  done  on  them  in  the  shop  before  they  become  finished  parts, 
are  usually  designated  as  "Stores,"  and  the  records  dealing  with 
this  class  of  material  are  called  "  Stores  Records." 

Parts  which  have  all  the  work  done  on  them  necessary  to 
make  them  ready  for  assembling  into  machines  or  into  assembly 
groups  of  machines  are  usually  designated  by  the  name  "Finished 
Parts,"  and  the  records  dealing  with  this  class  of  parts  are 
frequently  called  "Finished  Parts  Records."  The  last-named 
parts  are  sometimes  designated  by  the  word  "Stock,"  and  the 
records  called  "Stock  Records."  The  term  "Stock"  is  most 
generally  used  to  designate  finished  product  ready  for  shipment. 
Perhaps  the  most  definite  way  of  designating  all  materials  is  as 
follows : 

(a)  "Stores,"    consisting    of    raw    material   which    must    go 
through  or  enter  into  some  manufacturing  process  in  the  shop. 
In  this   class  would  come  pig  iron,  coal,  castings,  bar  steel, 
paint,  etc. 

(b)  "Purchased  Finished  Parts,"  consisting  of  all  parts  ready 
to  use  in  assembling  or  as  repair  parts,  which  are  purchased  out- 
side the  shop  in  their  finished  state.     In  this  class  would  come 
standard  bolts,  screws,  etc.,  or  radiators,  tires,  etc.,  in  an  auto- 
mobile factory. 

(c)  "Manufactured  Finished  Parts,"  consisting  of  all  parts 
which  must  be  manufactured  in  the  shop. 

(d)  "Finished   Product," .  consisting   of   the   stock   of   com- 
pletely assembled  machines  or  other  manufactured  article,  and 
sometimes  of  a  stock  of  assembled  groups  in  excess  of  such  groups 

185 


186     FACTORY  ORGANIZATION  AND  ADMINISTRATION 

as  are  required  for  manufacturing  and  assembling  machines, 
such  as  extra  armatures,  etc. 

(e)  "  Supplies,"  including  all  materials  not  entering  directly 
into  manufactured  product,  but  necessary  in  the  conduct  of  the 
business. 

It  is  the  custom  in  some  establishments  to  designate  the 
articles  in  classes  (b),  (c),  and  (d)  above  as  "  Stock."  It  will  be 
found,  however,  that  a  differentiation  of  departmental  records  in 
accordance  with  the  classification  given  above  will  generally  be 
advantageous  even  though  the  accounting  department's  double- 
entry  books  may  carry  only  a  single  "Materials"  account. 

201.  Perpetual  Inventory  of  Castings. — Fig.  74  shows  a  form 
for  keeping  record  of  castings.  At  the  left-hand  upper  portion 
of  the  record  are  spaces  for  the  name  of  the  part  for  which  the 
casting  is  used,  and  the  name  of  the  machine  of  which  it  is  a  part. 
At  the  right  are  spaces  for  designating  the  pattern  number,  the 
kind  of  material,  the  mark  number,  the  drawing  number,  and 
the  average  weight  of  the  castings;  also  the  minimum  stock, 
the  purchasing  quantity,  the  maximum  stock  in  excess  of  orders, 
the  bin  number  in  which  the  castings  are  located  in  the  castings 
warehouse,  and  the  time  usually  required  to  get  castings  in  from 
the  foundry. 

There  are  five  sets  of  columns  in  the  accounting  part  of  the 
record.  The  first  set  deals  with  the  number  of  castings  ordered 
through  the  purchasing  department.  The  first  column  in  this  set 
is  headed  "Requisition  Number,"  and  in  it  is  entered  the  number 
of  the  requisition  which  the  castings  clerk  makes  on  the  pur- 
chasing department  when  he  finds  it  necessary  to  order  castings. 
The  second  column  is  for  the  date  of  the  requisition,  the  fourth 
column  for  the  quantity  called  for  by  the  requisition,  and  the 
third  column  for  the  purchase  order  number.  This  third  column 
is  filled  out  when  the  castings  clerk  receives  back  from  the 
purchasing  department  an  extra  carbon  of  his  requisition  with  the 
purchase  order  number  on  it.  So  long  as  this  third  column  is 
vacant  it  shows  that  the  purchasing  department  has  not  placed 
the  order  for  the  castings.  This  may  be  due  to  negotiations 
with  foundries  or  to  new  pattern  or  change  in  pattern. 

The  second  set  of  columns  is  a  record  of  castings  received. 
Postings  are  made  in  this  set  of  columns  from  the  receiving  de- 
partment's reports  of  castings  received.  The  third  set  of  columns 
is  a  record  of  castings  reserved  for  production  orders  which  make 


STORES  AND  STOCK  DEPARTMENT 


187 


a  draft  on  the  stock  of  castings. 
Reservation  entries  are  made  in 
these  columns  from  the  stores 
department  copy  of  each  pro- 
duction order.  Whenever  pro- 
duction orders  are  finished,  the 
tags  which  accompanied  the  fin- 
ished goods  through  the  inspec- 
tion department  are  sent  to  the 
stores  office.  The  clerks  in  the 
stores  department  use  these  tags 
bearing  the  inspector's  stamp 
as  their  authority  for  canceling 
the  numbers  referring  to  live 
production  orders.  In  this  way 
only  those  numbers  which  do 
not  have  lines  drawn  through 
them  represent  production  or- 
ders which  are  still  in  process  of 
manufacture.  The  fourth  set 
of  columns  is  a  record  of  cast- 
ings used,  and  is  posted  from  the 
castings  warehouse-man's  re- 
ceipt forms  for  castings  drawn 
from  his  department.  The  fifth 
set  of  columns  is  a  record  of 
the  actual  balance  on  hand  in  the 
warehouse,  together  with  the 
balance  after  deducting  castings 
in  reserve  for  use  on  production 
orders  already  issued,  but  for 
which  the  castings  have  not  yet 
been  taken  from  the  castings 
warehouse.  The  balance  by  ac- 
tual count  can  conveniently  be 
reported  for  all  castings  of 
which  the  stock  on  hand  does 
not  exceed  10  or  15,  every  time 
a  withdrawal  is  made,  such 
balance  by  actual  count  be- 
ing noted  on  castings  ware- 


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188     FACTORY  ORGANIZATION  AND  ADMINISTRATION 

house-man's  receipts  for  castings  issued  when  he  turns  them 
in  to  the  castings  record  clerk.  For  castings  of  which  a  consider- 
able number  in  excess  of  10  or  15  are  carried,  the  castings  ware- 
house-man makes  a  systematic  practice  of  making  actual  counts 
and  reports  in  the  intervals  which  he  has  between  issuing,  receiv- 
ing, and  arranging  castings  in  the  warehouse.  In  this  way 
balances  by  actual  count  can  be  continuously  turned  in  on  a  con- 
siderable number  of  castings,  so  that  there  is  a  constant  checking 
and  correcting  of  the  castings  clerk's  records  by  actual  inventory. 
Such  checking  will  be  found  almost  indispensable,  as  the  falli- 
bility of  stock  clerks  and  castings  warehouse  attendants  is  far 
more  common  than  infallibility  of  records.  When  'discrepancies 
are  discovered  there  is  no  need  for  internal  dissension.  It  is 
desirable,  however,  that  some  person  in  authority  make  a  careful 
and  possibly  secret  investigation  in  case  there  appears  to  be  a 
continual  shortage  of  the  more  valuable  kind  of  castings,  such 
as  those  made  of  copper  and  brass. 

The  castings  warehouse  will  usually  have  to  be  equipped  with 
hoists  or  cranes  for  handling  heavy  castings.  Trolley  tracks 
for  hoists  running  into  the  aisles  between  the  bins  will  be  found 
convenient,  and  for  extra  heavy  castings  room  may  be  provided 
underneath  a  crane  constructed  of  an  I-beam  with  a  circle 

* 

track,  a  hoist  running  radially  along  the  I-beam.  This  arrange- 
ment makes  it  possible  to  cover  any  point  within  the  circle.  If 
the  shelves  and  other  storage  places  become  crowded,  it  may 
be  policy  to  retire  to  outdoor  storage  such  castings  as  appear 
to  be  becoming  obsolete.  As  a  general  rule,  it  is  best,  however, 
to  keep  all  castings  under  cover  except  where  a  special  point 
is  to  be  made  of  accumulating  a  coating  of  rust  for  the  purpose 
of  making  the  first  machining  easier. 

The  records  for  raw  material  other  than  castings  and  for 
purchased  finished  parts  may  take  practically  the  same  form 
as  the  castings  record  shown. 

202.  Perpetual  Inventory  of  Manufactured  Parts. — The  record 
covering  manufactured  finished  parts  will  usually  have  to  be 
kept  in  a  somewhat  different  form  from  the  records  covering  the 
castings  as  already  described. 

A  form  for  keeping  record  of  manufactured  finished  parts  is 
shown  in  Fig.  75.  In  the  upper  right-hand  corner  are  stated  the 
part  number  and  the  material  of  which  the  part  is  made.  In 
addition  to  these  data  the  sheet  or  card  specifies  the  name  of  the 


STORES  AND  STOCK  DEPARTMENT        189 

part,  the  drawing  number,  the  pattern  number  if  the  piece  is 
made  from  a  casting,  the  maximum  and  minimum  stock,  the 
manufacturing  quantity,  also  the  location  of  the  stock  of  finished 
parts  in  the  finished  parts  warehouse. 

The  accounting  part  of  the  finished  manufactured  parts  record 
is  divided  into  five  groups  of  columns. 

The  first  group  of  columns  is  a  record  of  stock  orders  entered, 
giving  the  date  of  the  production  order,  the  number  of  pieces, 
and  the  shop-order  number.  The  second  set  of  columns  is  a 
record  of  the  number  of  finished  pieces  received  by  the  finished 
parts  warehouse-man  from  the  shop  (usually  through  the  inspec- 
tion department),  giving  the  production  order  number,  the 
number  of  pieces  received,  and  the  date  they  were  received.  As 
soon  as  a  production  order  listed  in  the  first  set  of  columns  is 
completed,  as  shown  by  the  finished  parts  having  been  received 
by  the  finished  parts  warehouse-man,  a  line  is  drawn  through 
that  stock  order  number  in  the  first  set  of  columns.  In  this 
way  the  live  unfinished  orders  for  parts  will  always  be  those 
through  which  no  lines  are  drawn. 

In  any  shop  it  is  likely  that  the  tag  or  other  form  of  identi- 
fication which  accompanies  the  pieces  through  the  shop  may 
become  accidentally  lost,  or  pieces  may  be  taken  from  lots  of 
work  in  progress  through  ignorance  or  intentional  violation  of 
the  shop  system  by  men  in  assembling,  erecting,  shipping,  or 
other  departments,  thus  causing  an  apparent  shortage  or  dis- 
crepancy. Whenever  an  order  in  the  first  set  of  columns,  there- 
fore, looks  suspiciously  old,  or  when  it  is  suspected  that  the 
number  of  pieces  turned  into  finished  parts  warehouse,  though  not 
the  entire  lot,  is  likely  to  be  all  the  pieces  that  will  be  turned 
in  on  the  order  in  question,  it  will  be  desirable  for  the  head  of  the 
manufactured  finished  parts  records  to  start  an  investigation 
through  the  proper  channels  with  a  view  to  striking  off  his  records 
any  orders  as  dead  or  completed  for  which  the  material  cannot 
be  found  in  the  shop.  This  sort  of  condition  should  happen 
very  rarely  in  a  well-managed  shop,  and  it  is  important  that 
every  case  of  this  sort  be  most  carefully  traced  with  the  end  in 
view  of  discovering  who  was  responsible  for  the  irregularity. 

The  third  set  of  columns  is  a  record  of  the  reservations  of 
finished  manufactured  parts  called  for  by  bills  of  material  and 
supply  shipment  orders.  Entries  in  this  column  are  canceled 
as  soon  as  the  parts  are  actually  withdrawn,  as  shown  by  the  ware- 


190     FACTORY  ORGANIZATION  AND  ADMINISTRATION 


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STORES  AND  STOCK  DEPARTMENT  191 

house  withdrawal's  receipts,  which  are  turned  in  daily  to  the  fin- 
ished parts  clerk,  who  passes  them  on  to  the  cost  department. 

The  fourth  set  of  columns  is  a  record  of  parts  withdrawn, 
posted  from  the  finished  parts  warehouse  withdrawal  receipts 
already  mentioned.  The  first  column  gives  the  order  number, 
which  may  be  either  a  "Bill  of  Material"  order,  on  which  the 
shop  draws  parts  for  assembling  purposes,  or  a  shipping  order 
for  supply  parts.  If  the  former,  the  number  delivered  to  shop 
is  entered  in  the  second  column  in  this  group.  If  the  pieces 
were  shipped,  they  are  entered  in  the  third  column,  headed 
"  Amount  Shipped."  The  last  column  in  this  group  states  the 
date  the  pieces  were  used. 

The  last  group  of  columns  is  the  final  record  of  actual  balance 
in  stock,  the  first  column  giving  the  balance,  deducting  those 
in  reserve,  and  the  last  column  the  actual  count  in  the  warehouse. 
This  actual  count  is  checked  up  from  time  to  time  in  precisely 
the  same  manner  as  in  the  castings  warehouse.  Where  the  stock 
is  not  too  great  to  make  it  a  hardship  to  make  an  actual  count 
every  time  a  lot  is  received  from  the  shop,  such  actual  count  is 
made  and  the  balance  by  actual  count  noted  by  the  storekeeper 
of  the  finished  parts  warehouse  on  his  reports  to  the  record  clerk 
of  finished  parts. 

203.  Bin  Tickets. — A  bin-ticket  record  system  will  also 
facilitate  the  keeping  up  of  an  accurate  record  in  the  warehouse 
itself.  Another  reason  for  using  a  bin  ticket  is  that  each  stock- 
man can  be  required  to  enter  his  initials  on  the  bin  record  every 
time  he  withdraws  stock,  and  in  this  way  he  can  be  held  to 
accuracy  and  prevented  from  taking  an  excess  of  small  parts  and 
letting  the  surplus  lie  around  the  packing-room.  The  bin  ticket 
cannot  usually  be  made  to  serve  as  the  record  of  stock  on  hand, 
such  as  is  kept  by  a  regular  stock-record  clerk,  because  the  records 
for  quick  reference  and  entering  must  be  in  compact  form. 
However,  the  bin  ticket  has  a  salutary  disciplinary  effect,  be- 
sides being  useful  in  posting  new  stockmen  as  to  the  correct 
names  of  stock. 

A  form  for  bin  ticket  is  shown  in  Fig.  76.  This  ticket  bears 
spaces  for  the  number  of  the  bin,  the  mark  number  of  the  piece, 
the  name  of  the  piece,  the  machines  on  which  the  piece  is  used, 
the  drawing  number,  pattern  number,  and  dimensions.  Also  a 

statement  of  the  minimum  stock  as  follows:  "When  only 

left,  write  out  new  ticket  and  send  this  to  storekeeper."  Below 


192     FACTORY  ORGANIZATION  AND  ADMINISTRATION 

the  above  heading  is  the  record  part  of  the  ticket,  printed  on 
both  sides,  with  a  column  for  date,  a  column  for  stockman's 
name  or  initials,  and  columns  headed,  "In,"  "Out,"  and  "Left." 

Fig.  77  shows  a  form  for  a 
so-called  "Temporary  Bin 
Ticket."  In  the  system  in 
which  this  was  used,  the  reg- 
ular bin  ticket  was  sent  to 
the  head  stock  clerk  as  soon 
as  the  stock  reached  the  mini- 
mum, and  at  the  same  time  a 
"Temporary  Bin  Ticket"  was 
fastened  to  the  bin.  This 
temporary  bin  ticket  bears 
the  same  heading  and  record 
form  as  the  regular  bin  ticket, 
with  the  following  instruction 
memorandum  in  addition : 
"Stock  Low— When  stock 
falls  below  minimum,  fill  out 
and  attach  this  ticket.  Send 
regular  ticket  to  head  stock 
clerk.  When  regular  ticket 
is  returned,  this  ticket  to  re- 
main attached  to  back  of  reg- 
ular ticket  till  stock  reaches 
required  quantity."  The  color 
of  the  "Temporary  Bin 
Ticket"  is  salmon,  so  that  as 
FIG.  76.— Form  for  bin  ticket  in  store-  any  person  jn  authority  goes 


(  ©  "] 

BIN  TICKET 

BIN    No. 

MARK  No. 

NAME- 

MACHINES  ON 

WHICH   i,i«srrv 

PATTCBN 

LEFT  WRITE  OUT  NEW  TICKET 
S  TO   STORE-KEEPER. 

AND   SEND  TH 

DATE 

STOCKMAN'S 
NAME 

IN 

OUT 

LEFT 

• 

BALANCE  ON  OTHER  SIDE 

room   recording    actual    receipts    and 
withdrawals.     Manila    tag  with  rein- 


through  the  warehouse,  he 

forced  eyelet,  3  1/8  inches' wide^  61/2  can  tell  by  the  salmon-colored 
inches  high.  tag  being  attached  to  a  bin 

that  the  stock  is  below  the 

minimum.  If  only  the  salmon-colored  tag  is  attached,  it  shows 
that  the  matter  is  being  taken  up  by  the  head  stock  clerk.  If 
both  the  salmon-colored  tag  and  the  regular  tag  are  attached, 
it  shows  that  the  stock  clerk  has  investigated  the  matter  and  has 
arranged  it  to  his  evident  satisfaction;  but  so  long  as  the  sal- 
mon-colored tag  remains  at  the  bin  it  shows  that  the  stock  is  not 
yet  up  to  the  required  minimum. 


STORES  AND  STOCK  DEPARTMENT 


193 


© 


TEMPORARY  BIN  TICKET 

STO  C  K  LOW-      When  stock  falls  below  minimum,  fill  out  and 
attach  this  ticket.       Send  regular  ticket  to  head  stock  clerk. 
When  regular  ticket  is  returned  this  ticket  to  remain  attached   to 
back  of  regular  ticket  till  stock  reaches  required  quantity. 

BIN  No, 


MACHINES  ON 


DIMENSIONS. 


204.  "Finding  Lists." — It  is  very  essential  that  finding  lists 
be  provided  in  the  finished  parts  and  castings  warehouses.     Such 
finding  lists  may  be  in  the  form  of  card  records.     For  convenience 
there  should  be  one  set  arranged  by  consecutive  mark  numbers  in 
the  case  of  finished  parts,  and 

by  consecutive  pattern  num- 
bers in  the  case  of  castings, 
together  with  the  correspond- 
ing bin  number  or  other  state- 
ment of  location;  also  another 
record  arranged  alphabetically 
by  the  name  of  the  part.  In 
this  way  it  is  easy  to  find 
promptly  the  location  of  any 
items.  Such  finding  lists 
should  be  located  near  the  en- 
trance to  the  stock  warehouse. 
If  there  are  several  floors,  it 
may  be  found  a  saving  of  time 
and  labor  to  have  more  than 
one  finding  list  in  the  ware- 
house. 

205.  Numbering  Storeroom 
Bins. — The  best  way  to  num- 
ber bins  in  stock  warehouses 
is  to  divide  the  whole  cubic 
volume    of    the    house    into 
spaces,   and    allot    a    certain 
number  of  spaces  to  each  vol- 
ume, whether  the  volume  is 
to  contain  large  or  small  bins. 
In  this  way,  no  matter  what 
changes  or  rearrangements  in 
the  sizes  of  the  bins  there  may 
be,  the  same  number  will  al- 
ways designate  the  same  space 

in  the  warehouse.  For  instance,  all  bins  in  the  10,000  series 
would  represent  bins  in  aisle  10,  those  beginning  with  10,500 
representing  the  bins  on  one  side  of  the  aisle,  and  those  begin- 
ning with  10,000  the  bins  on  the  opposite  side  of  the  aisle.  If 
the  bins  are  large,  of  course  a  good  many  numbers  will  not  be 

13 


BALANCE  ON  OTHER  SIDE 


FIG.  77. — Form  for  temporary  bin 
ticket  printed  on  salmon-colored  or 
other  distinguishing  tag  stock  to  call 
attention  to  the  fact  that  quantity  is 
under  the  low  limit.  Salmon-colored 
tag  with  reinforced  eyelet,  31/8  inches 
wide,  61/2  inches  high. 


194     FACTORY  ORGANIZATION  AND  ADMINISTRATION 

used.  This  is  practically  the  same  principle  that  has  been  finally 
adopted  as  the  most  satisfactory  method  of  numbering  houses. in 
city  streets,  and  will  be  found  equally  satisfactory  in  storage 
warehouses. 


REQUEST     FOR    PRODUCTION     ORDER 

Date 

TO  PRODUCT/ON  DEPARTMENT: 

Please  enter  production  order  as  follows: 

Wantedfor{lh?pping  Order  No. 


No.  pieces  wanted 

Part  No. , Name  of  Part 

Drawing  No. Pattern  No Material A.V.  Weight, 

Max.  Stock Minimum  Stock Mfg.  QnanMty 

Actually  in  stock  now  Deducting  .Reserve 

Incomplete  Production  Orders  as  follows:. 
Order  No.  :        Date 


Cost: 

Labor  per 

Labor  Load 

Material 

Material  Load. 
Total  Cost 


PRODUCTION  DEPARTMENT'S  RECOMMENDATION  AS  TO  PRODUCTION  ORDER  TO  BE  ENTERED: 


DRAWING  DEPARTMENT'S  COMMENTS  AS  TO  PROPOSED  CHANGES,  ETC.: 


SHOP  SUPERINTENDENT'S  COMMENTS  AS  TO  ENTERING  ABOVE  PRODUCTION  ORDER: 


PRODUCTION  ORDER  NO. DATE FOR  NO.  PCS.. 


FIG.  78. — Stores  record  clerk's  request  for  production  order.  This  request 
may  emanate  also  from  other  sources.  White  bond  paper,  81/2  inches  wide, 
10  1/2  inches  high. 

206.  Replenishment  of  Stores. — Reference  has  been  made  to 
minimum  stock  and  manufacturing  quantities  in  connection 
with  the  records  of  finished  parts  and  of  castings.  It  is  not 


STORES  AND  STOCK  DEPARTMENT 


195 


usually  wise  to  have  these  figures  serve  any  other  purpose  than 
as  guide  to  the  stock  record  clerks,  to  notify  them  that  they 
must  send  in  the  notice  of  the  low  condition  of  stock  to  the 
person  or  department  in  charge  of  production.  One  method 
of  sending  in  such  notice  might  be  to  send  in  the  stock  sheet  or 
card  direct  to  the  person  or  department  in  charge  of  production. 
However,  this  method  results  in  the  stopping  of  posting  work 
on  the  stock  sheets  or  cards,  and  is  likely  to  be  an  unsatisfactory 
method  in  the  long  run.  A  better  scheme  is  one  of  sending  a 
notice  to  the  production  manager  or  production  department, 
giving  all  the  information  contained  on  the  heading  of  the  stock 
sheet,  and  also  complete  information  as  to  the  unfinished  orders, 


STORE-ROOM  SUPPLY. 


Please  Order- 


No.          Size 


Date. 


(Only  one  Item  on  this  Card) 
By 


Amount  on  hand- 
Remarks 


FIG.  79. — Storeroom  request  to  head  storekeeper  for  replenishment  of 
parts  or  supplies.  Orange-colored  bond  paper,  5  inches  wide,  3  inches 
high. 

the  balance  in  stock,  number  in  reserve,  etc.  Fig.  78  is  a  form 
of  such  notice  or  request. 

A  form  to  be  used  by  stores  department  in  making  requisition 
on  the  head  of  that  department  in  replenishing  stores  is  shown 
in  Fig.  79.  On  receipt  of  this  requisition  or  notice,  the  head 
of  the  department  issues  requisition  on  purchasing  department 
similar  to  Fig.  69. 

This  request  for  replenishment  coming  from  the  storeroom 
may  at  first  sight  appear  like  a  superfluity  in  view  of  the  fact 
that  the  stores  record  clerks  have  records  which  indicate  when  the 
low  limit  is  reached.  However,  it  is  a  double  precaution  to 
have  the  storeroom  send  in  such  a  request  for  replenishment 
and  in  practice  it  will  be  found  desirable,  as  an  error  or  oversight 
on  the  part  of  the  stores  record  clerks  in  allowing  stores  of  a  cer- 


196     FACTORY  ORGANIZATION  AND  ADMINISTRATION 


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STORES  AND  STOCK  DEPARTMENT 


197 


tain  item  to  get  too  low  are  in  this  manner  caught  by  the  store- 
room help. 

207.  Monthly  Balances  Showing  Money  Value  as  well  as 
Quantity  of  Stores. — The  stores  and  stock  record  sheets  described 
heretofore  afford  means  for  knowing  at  any  time  the  balance  on 
hand  of  all  materials.  Should  it  be  desired  to  express  the  value  of 
this  material  in  dollars  and  cents,  as  will  be  the  case  at  inventory 
time,  or  as  is  the  case  in  companies  making  quarterly  or  monthly 
statements,  it  will  be  found  necessary  to  specify  cost  data  on 
the  stock  record  sheets  or  cards.  In  any  event  the  stock  records 
form  a  very  convenient  place  for  having  these  costs,  because 
then  the  costs  are  available  and  ready  for  use,  and  found  in  the 


MONTHLY    COMPARISON    OF   STOCK    MATERIAL    BALANCES. 

MONTH    OF  September,    1909 

CLASS    OF    MATERIAL 

Month  of 
Sept.  1909 

Compared 
with   Month 
of  Aug.  1909 

Increase 

Decrease 

Axles 
Bearings 
Bolts  and  Nuts 
(etc.) 

820.49 

620.35 

200.14 

615.26 

600.15 

15.11 

2126.15 

2237.26 

111.11 

FIG.  81. — Monthly  comparison  of  money  value  of  leading  material  balances. 
White  bond  paper,  81/2  inches  wide,  10  1/2  inches  high. 

same  place  as  the  balances  on  hand.  Fig.  80  is  a  typical  card 
used  in  a  system  in  which  monthly  statements  are  made.  The 
upper  right-hand  corner  of  the  record  gives  full  data  as  to 
manufacturing  costs. 

It  may  be  found  desirable  to  collect  various  material  items 
into  groups  and  compare  the  money  value  of  the  monthly  bal- 
ances, showing  increase  or  decrease  in  each  class.  Fig.  81  shows 
a  form  used  for  this  purpose. 

208.  Use  of  Tabulating  Machine  in  Obtaining  Money  Value 
of  Daily  Material  Receipts  and  Disbursements. — Fig.  82  shows 
a  tabulating  machine  punch  card  for  transcription  of  storeroom 


198    FACTORY  ORGANIZATION  AND  ADMINISTRATION 


o 

MATE 

i-i        CJ         eo 

RIAL 

^            10              0 

t-             CO 

bursements 

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?IQ.  82.  —  Tabulating  machine  punch  card  for  transcription  of  store-room  records  of  rec 
Dimensions  approximately  3  1/4X7  1/2  inches. 

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Piece  No. 

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STORES  AND  STOCK  DEPARTMENT  199 

records  of  receipts  and  disbursements  of  materials.  In  order  to 
use  a  working  card  in  the  tabulating  machine  it  is  necessary  to 
designate  everything  numerically,  the  record  being  formed  by 
punching  the  digits  in  columns  of  figures  printed  on  a  card,  such 
punching  being  done  on  a  special  machine  made  by  the  Hol- 
lerith Tabulating  Machine  Co.  The  punching  may  be  done 
as  a  transference  of  records  written  originally  in  pencil  on  other 
slips. 

The  punched  tickets  are  put  first  into  an  assorting  machine 
which  classifies  them  by  the  same  numbers  in  any  one  column, 
for  instance,  material-tickets  may  be  assorted  by  departments,  by 
piece  number,  by  quantity,  by  order  numbers,  etc.,  depending  upon 
which  column  is  being  used  for  the  purpose  of  assorting.  After 
the  assorting  process  is  accomplished  at  a  very  rapid  rate  by  the 
machine  the  cards  are  transferred  to  the  accumulating  or  adding 
machine,  which  adds  up  the  hours  and  minutes  or  dollars  and 
cents  for  any  package  of  cards. 

209.  Withdrawing  Materials  from  Stores. — In  connection 
with  the  drawing  of  needed  material  from  stores,  there  will  be 
necessary  some  form  of  requisition  on  the  storekeeper.  Usually 
the  tag  which  accompanies  a  stock  order  of  individual  parts 
through  the  shop  is  provided  with  a  coupon  which  serves  as  an 
order  and  receipt  for  the  necessary  material,  so  that  no  requisi- 
tion is  needed  to  get  the  material  for  this  class  of  order. 

In  general,  a  well-organized  planning  or  production  depart- 
ment provides  ready-written  in  advance,  all  necessary  material 
withdrawal  slips,  these  being  considered  as  essential  a  feature  of 
planning  as  the  blue-prints. 

There  will,  however,  be  repair  orders,  assembling  and  erecting 
orders,  etc.,  which  necessitate  the  getting  of  material  from  the 
stores  warehouse.  For  this  purpose  a  requisition  on  stores 
similar  to  Fig.  67  must  be  used.  Fig.  83  shows  an  additional 
form  used  for  this  purpose.  This  form,  after  passing  through  the 
hands  of  the  head  storekeeper,  is  sent  to  the  cost  department, 
which  prices  it  in  some  companies.  In  other  companies  the 
stores  record  clerks  insert  the  prices  from  their  records.  The 
cost  department  refers  back  to  the  department  making  the 
requisition  any  calls  for  material  which  seem  to  be  in  excess  of 
requirements  or  in  error.  Systems  have  been  tried  whereby 
only  one  issuance  of  material  for  a  given  order  will  be  made  to 
the  shop,  and  only  such  material  issued  as  is  called  for  by  the  bill 


200     FACTORY  ORGANIZATION  AND  ADMINISTRATION 


of  material.  As  a  general  rule  it  is  better  policy  to  issue  material 
when  called  for  by  a  responsible  department  foreman,  and 
adjust  later  any  discrepancies  between  bills  of  material  or  other 
specifications  and  foreman's  statement  as  to  his  requirements. 


Return  to  Office  each  day  those  Cards  filled  the  previous  day 

DEPARTMENT    REQUISITION    ON    STORES. 

Data                                                                             1Qf) 

Tn 

/)*j 

Deliuer  to  bearer  the  following  materials 

Quantity 

DESCRIPTION                                   Price 

Amou 

t 

Priced  ty 

•           C^sA  fcy                                       TW,f 

And  chai 
Infi 
Do  n 
Dor 

Filled  by 

ge  same  to  account  of 

lling  note  weight  when  neccessary. 
ot  put  any  writing  in  price  or  amount  columns, 
ot  order  material  to  be  used  for  more  than  one  account  on  same 

[J5 

card. 

uing 
reman 
Clerk 

lor 

r>Ant. 

Fia.  83. — Another  form  for  requisition  on  storeroom.     (See  also  Fig.  67.) 
Manila  card,  4  inches  wide,  6  inches  high. 

Under  no  circumstances  should  production  be  stopped  pending 
adjustment  of  technicalities  as  to  quantity  of  material. 

REFERENCES 

GOING:  "Methods  of  the  Santa  Fe,"  Chapter  II. 

GOING:  "Principles  of  Industrial  Engineering,"  Chapter  IX. 

ENNIS:  "Works  Management,"  Chapter  V. 

COOK:  "Factory  Management,"  Chapters  VII  and  VIII. 

PARKHUBST:  "Applied  Methods  of  Scientific  Management,"  Chapter  V. 

KIMBALL:  "Principles  of  Industrial  Organization,"  Chapter  XII. 


CHAPTER  XVII 
PLANNING  AND  SUPERVISING  PRODUCTION 

210.  Title   of  Department  Controlling  Production. — In   Mr. 

Taylor's  original  functional  organization  he  separated  planning 
from  production.  Under  the  planning  group  he  listed  four 
principal  divisions  in  the  office  and  four  principal  divisions  in  the 
shop.  In  the  office  the  divisions  were  as  follows: 

1.  The  Route  and  Order  of  Work  Division. 

2.  The  Timestudy  and  Instruction  Card  Division. 

3.  The    Time    and    Cost    Division. 

4.  The  Disciplinary  Division. 

In  the  shop  the  divisions  were : 

1.  The  gang  boss  or  shop  foreman. 

2.  The  speed  boss  or  demonstrator. 

3.  The  repair  boss  or  maintenance  man. 

4.  The  inspector. 

In  explaining  division  of  production  activities  along  functional 
lines  that  would  be  natural,  it  has  been  suggested  that  the  func- 
tional divisions'  duties  could  best  be  denned  by  answering  the 
following  questions: 

1.  What  shall  we  make? 

2.  Where  shall  we  make  it? 

3.  When  shall  we  make  it? 

4.  How  much  will  we  have  to  pay  to  have  it  made  right? 

5.  How  much  will  it  cost? 

6.  How  must  we  handle  our  labor  to  get  the  best  results? 

In  the  earliest  concerns  adopting  the  Taylor  organization,  we 
find  all  of  the  functional  divisions  designated  as  divisions  of  the 
planning  department.  If  the  writer  were  to  make  a  choice 
between  " planning  or  "production"  as  the  name  of  the  de- 
partment including  functional  control,  he  would  prefer  the  latter 
as  all  of  the  functions  have  to  do  with  production  even  though 
the  individual  functional  division  may  deal  with  planning,  prepa- 
ration, scheduling,  or  inspection,  and  there  might  be  a  fifth 
division  dealing  with  production  records. 

201 


202      FACTORY  ORGANIZATION  AND  ADMINISTRATION 

With  the  evolution  of  the  principle  of  functional  control  we  find 
these  functions  apply  today  not  only  to  the  manufacturing  group 
but  also  to  the  sales,  financial,  and  personnel  groups.  In  order 
to  appreciate  the  modern  organization,  it  is  necessary,  however, 
ti  survey  its  development  from  Mr.  Taylor's  original  outline. 
Mr.  Taylor  outlines  the  functions  of  the  planning  department  as 
follows : 

A.  The  complete  analysis  of  all  orders  for  machine  or  work  taken  by  the 
company. 

B.  Time  study  for  all  work  done  by  hand  throughout  the  works,  in- 
cluding that  done  in  setting  the  work  in  machines,  and  all  bench,  vice  work 
and  transportation,  etc. 

C.  T  me  study  for  all  operation  done  by  the  var.ous  machines. 

D.  The  balance  of  all  materials,  raw  materials,  stores  and  finished  parts, 
and  the  balance  of  the  work  ahead  for  each  class  of  machines  and  workmen. 

E.  The  analysis  of  all  inquiries  for  new  work  received  in  the  sales  depart- 
ment and  promises  for  time  of  delivery. 

F.  The  cost  of  all  items  manufactured  with  complete  expense  analysis 
and  complete  monthly  comparative  cost  and  expense  exhibits. 

G.  The  pay  department. 

H.  The  symbol  system  for  identification  of  parts  and  of  charges. 

/.  Information  Bureau. 

J.  Standards. 

K.  Maintenance  of  system  and  plant,  and  use  of  the  tickler. 

L.  Messenger  system  and  post  office  delivery. 

M.  Employment  bureau. 

N.  The  shop  disciplinarian. 

0.  A    mutual    accident    :nsurance    association. 

P.  Rush  order  department. 

Q.  Improvement  of  system  or  plant. 

Mr.  Parkhurst  employed  at  the  Ferracute  Machine  Company 
an  organization  slightly  different  from  that  indicated  by  Taylor. 
His  organization  for  the  planning  department  is  as  follows: 

A.  Production  Clerk.  J.  Time  Clerk. 

B.  Shop  Engineer.  K.  Schedule  Clerk. 

C.  Stores  Clerk.  L.  Factory  Mail  Clerk. 

D.  Cost  Clerk.  M.  Time  Clerk. 

E.  Route  Clerk.  N.  Inspector. 

F.  Order-of-work  Clerk.  O.  Stores  Keeper. 

G.  Shipping  Clerk.  P.  Move  Material  Boss. 
H.  Receiving  Clerk. 

211.  Reasons  for  Functional  Control. — Functional  control 
came  in  answer  to  a  call  for  help  from  the  business  owners  and 


PLANNING  AND  SUPERVISING  PRODUCTION  203 

managers  of  industrial  establishments  who  were  becoming 
nervous  wrecks  because  of  the  need  of  constant  running  from 
one  department  to  another  for  information  which  could  not  be 
half  given.  They  began  to  realize  that  the  cost  of  their  own 
time  and  energy,  and  the  lost  time  of  the  army  of  emissaries 
they  were  constantly  sending  to  the  shop,  amounted  to  a  large 
financial  aggregate. 

The  absolute  knowledge  of  the  condition  of  the  manufac- 
turing department — its  percentage  of  uncompleted  work,  the 
condition  of  this  work,  and  the  factory's  capacity  for  further 
orders — -has  a  financial  value.  The  cost  of  production  has  been 
shown  to  be  lowered  after  shops  have  instituted  a  well-managed 
production  department.  More  than  this ;  after  some  months'  run- 
ning of  the  production  department,  the  work  of  the  office,  sales 
department,  time-keepers,  correspondents,  shipping  department, 
and  cost  clerks  has  been  known  to  become  so  much  simpler  that 
not  only  was  the  operation  of  these  departments  much  more 
efficient,  but  it  could  be  done  with  less  help. 

What  are  the  functions  and  duties  of  this  department?     In  "") 
general,  its  task  is  to  lay  out  in  detail  all  work  to  be  done  in  the     I 
factory,  to  keep  perfect  record  of  progress  of  work  on  all  orders,     / 
and  to  see  that  foremen  and  other  executive  officers  are  kept    / 
closely  advised  of  all  conditions  requiring  their  special  attention.   / 
It  will  readily  be  seen  that  by  centering  all  of  the  record  and  statis- 
tical routine  into  a  distinct  department,  foremen  and  superin- 
tendents are  left  far  more  free  to  do  real  executive  work  than 
under  the  old-fashioned  systems  in  which  they  carried  the  entire 
burden  of  recording  and  following  up  all  work  in  a  shop. 

In  the  majority  of  shops  to-day  the  production  record  follows 
the  actual  production.  There  is  no  systematic  issuing  of  detail 
jobs  in  advance.  An  effective  shop  production  system  always 
involves  the  writing  out  in  detail  of  all  jobs  and  the  specifying  of 
all  operations  or  " routing"  necessary  to  complete  every  item, 
together  with  instructions  as  to  the  details  of  each  operation. 

The  providing  of  such  an  advance  stock  of  job  order  tickets, 
and  furnishing  them  to  the  shop,  with  definite  instructions  as 
to  the  sequence  in  which  the  jobs  are  to  be  worked  on,  enables 
foremen  to  plan  and  lay  out  their  work,  providing  they  have 
the  ability  to  do  this — an  essential  quality  to  a  good  shop  fore- 
man. A  well-managed  production  department  is  of  great  assist- 
ance to  a  foreman  in  making  such  plans. 


204      FACTORY  ORGANIZATION  AND  ADMINISTRATION 

Without  such  a  department  it  is  next  to  impossible  for  depart- 
ment foremen  to  keep  their  orders  and  work  in  systematic  shape. 
From  this  results  delay  in  getting  out  orders;  failure  to  discover 
shortages  or  incompleteness  until  a  piece  of  work  is  ready  for 
shipment;  inaccurate  time  and  cost  returns,  and  general  loose- 
ness of  methods. 

212.  Carrying  the  Functional  Organization  into  the  Shop. — 
This  is  accomplished  by  having  in  each  shop  a  functional  staff 
of  overseers.     These  overseers  are  responsible  as  to  policies  and 
methods  to  the  heads  of  their  respective  functional  departments. 
They  are  responsible  as  to  results  in  their  particular  shop  to  the 
shop  foremen.     If  the  shop  is  small  one  overseer  may  represent 
more  than  one  function.     Some  of  the  typical  duties  of  these 
functional  representatives  in  the  individual  shop  are  as  follows: 

The  planning  overseer  receives  the  particular  shop's  copies  of 
all  work  orders,  sees  that  all  necessary  paper  work  for  operating 
all  of  this  work  in  the  shop  is  prepared,  covering  time  tickets, 
stores  issues,  etc.  He  will  maintain  record  of  employees  and 
their  efficiency,  look  after  assignment  of  piece  rates  or  day  rates, 
and  all  matters  pertaining  to  payroll.  He  must  check  all  time 
and  material  tickets. 

The  preparation  overseer  must  see  to  it  that  all  materials, 
tools,  and  machinery  maintenance  of  the  shop  are  taken  care  of. 

The  scheduling  overseer  will  maintain  such  schedule  boards, 
trays,  or  other  devices  as  are  used  in  maintaining  and  recording 
all  operations  and  their  relation  to  schedules.  He  will  also  keep 
a  complete  record  of  the  balance  of  work  in  process.  He  will 
report  any  interferences  with  the  schedule. 

The  production  overseer  must  be  capable  of  doing  the  things 
which  Taylor  assigned  to  his  speed  boss.  He  must  be  able  to  set 
up  the  work,  adjust  tools,  regulate  feeds  and  speeds,  and  make 
demonstrations  to  show  that  the  work  can  be  done  in  accordance 
with  instructions  developed  by  the  time  study  department. 

The  inspection  overseer's  duties  are  self-evident. 

213.  Qualifications  of  Head  of  Production  or  Planning  De- 
partment.— The  production  superintendent  must  be  a  man  of 
considerable  capacity.     He  must  be  able  to  make  the  best  use 
of  recording  sj^stems,  and  at  the  same  time  be  a  man  who  can 
see  things  with  his  own  eyes  in  the  shop.     He  confers  daily  with 
the  works  manager  and  brings  up  all  matters  in  connection  with 
condition  of  orders,  getting  out  of  work,  and  capacity  of  the 


PLANNING  AND  SUPERVISING  PRODUCTION 


205 


shop,  at  foremen's  meetings  held  regularly.     The  importance  of 
such  foremen's  meetings  cannot  be  over-estimated.     . 

The  man  in  charge  of  the  production  department  needs  to 
be  given  such  intelligent  assistance  as  may  be  required,  to  make 
every  job  ticket  or  tag  that  goes  into  the  shop  as  clear  a  guide 
as  possible  to  foremen,  workmen,  and  time-keepers,  and  to  pre- 
vent inaccurate  returns  to  the  cost  department  or  other  depart- 
ments. With  a  well-managed  production  department  there  is 
no  need  of  any  clerical  work  by  shop  foremen.  The  production 


FIG.  84. — Classification  of  the  functions  of  the  production  department 
under  five  heads.  Some  organizations  include  time-keeping,  time-study, 
and  rate-fixing  with  these  duties. 

department  does  away  with  the  necessity  for  shop  clerks  and 
foremen's  clerks;  neither  must  the  foremen  do  any  clerical  work. 
The  head  of  the  production  department  should  have  no  other 
duties  than  those  connected  with  that  department,  the  special 
functions  of  which  are  the  tracing  of  work  in  progress,  the  pre- 
paring of  detailed  individual  job  orders,  or  routing,  preparing 
instruction  cards,  fixing  time  standards,  determining  the  order 
of  precedence  of  each  job  (sometimes  called  scheduling),  and 
the  keeping  of  a  record  of  all  work  in  progress. 


206       FACTORY  ORGANIZATION  AND  ADMINISTRATION 


214.  Relation  of  Production  or  Planning  Department  to  Other 
Departments. — The  chart  shown  in  Fig.  84  indicates  the  functions 
usually  assigned  to  the  production  department — although  other 
functions  have  been  added  in  some  establishments,  some  com- 
panies preferring  to  include  time-keeping  and  time-study,  to- 


Order 
Dept. 

One  Copy  of  Order 

Drafting 
Dept. 

<O^Sy  Production  or  Planning     >/^    *° 
*      >v            Dept<            ^4$* 
otorcs     ^  1  Route       1 

Purchasing 

1  CP  '    I  Checked  M 

,tl.  withdr'l  Slips1        Cltjrk        '          Pur<**se  B^ 
Material  withdrawal  Slips 
Route  Sheet 
Bill  of  Material 
Drawi  ig  List 
Drawings 

uisltions                Dept. 

Instruction  Card  Clerk  1 

All  Previous  Papers 
and  Instruction  Cards 

Rate  Fixing  Clerk 

All  Previous  Papers 
and  Tim'e  Cards 
Y 

Order  of  Work  Clerk            | 

All  Papers 

|   Production  Clerk  or  Order  Tracer 

1 

Orders  and  Papers  as  Required 


FIG.  85. — Relation  of  production  or  planning  department  to  other  depart- 
ments, and  path  of  an  order  through  the  production  department. 

gether  with  rate-fixing,  as  also  parts  of  the  work  of  a  production 
department. 

The  production  department  is  not  intended  in  any  way  to 
lessen  the  power  of  the  shop  superintendent.  It  is  intended  to 
relieve  the  superintendent,  and  to  assist  him  by  constituting  a 
certain  place  of  responsibility  for  accurate  knowledge  as  to  all 


PLANNING  AND  SUPERVISING  PRODUCTION  207 

matters  of  production.  When  thus  fully  posted,  the  superin- 
tendent is  free  to  use  his  executive  authority,  and  to  be  often 
about  the  shop.  The  responsibility  of  tracing  and  keeping  before 
the  superintendent  and  foremen  all  matters  of  precedence  and 
urgency  rests  wholly  with  the  production  department.  Many 
shops  throw  this  responsibility  on  a  variety  of  persons  connected 
with  the  sales,  correspondence,  and  general  office  management, 
resulting  in  a  multiplicity  of  bosses  and  considerable  useless 
running  around. 

That  it  may  work  to  best  advantage,  it  has  been  found  desir- 
able to  take  the  shop  production  department  from  under  juris- 
diction of  the  shop  superintendent.  By  this  arrangement  the 
department  has  no  hesitancy  or  timidity  about  keeping  strongly 
after  any  delays  or  failures  to  realize  promises  or  estimates. 

Fig.  85  shows  in  detail  the  relation  of  the  Production  De- 
partment to  other  departments.  It  shows  how  the  Order  De- 
partment sends  one  copy  of  the  order  to  the  Drafting  Department, 
and  one  copy  of  the  order  to  the  Production  Department.  The 
Drafting  Department  sends  the  drawing  list,  drawings  and  bills 
of  material  to  the  Production  Department.  The  particular 
individual  in  the  Production  Department  who  receives  the  orders 
from  the  Order  Department  and  the  papers  designated  from  the 
Drafting  Department  is  the  Route  Clerk. 

215.  Routing. — The  route  clerk  makes  up  a  route  chart  for 
every  order.  In  case  the  order  is  for  a  machine,  he  lays  out  the 
chart  so  as  to  show  what  groups  must  be  completed  before  general 
assembly  or  erecting  can  take  place.  He  also  indicates  what 
pieces  must  be  completed  before  any  one  group  can  be  assembled. 
He  must  be  familiar  with  the  equipment  and  processes  of  the 
shop,  and  should  have  at  hand  general  process  maps  and  models 
of  the  shop  showing  departmental  lay-outs  and  equipment. 
The  drawings,  drawing  lists  and  bills  of  material  which  he  receives 
from  the  drafting  department  aid  him  in  preparing  his  route 
chart. 

The  route  clerk,  on  receipt  of  the  bill  of  material  from  the 
drafting  department  writes  out  or  has  an  assistant  write  out  the 
withdrawal  slips  or  orders  on  storeroom  for  any  needed  materials. 
These  he  forwards  to  the  stores  department  where  the  stores 
record  clerk  or  balance  of  stores  clerk,  as  he  is  sometimes  called, 
checks  the  requirements  up  against  his  perpetual  inventory 
and  designates  what  production  orders  need  to  be  entered  for 


208      FACTORY  ORGANIZATION  AND  ADMINISTRATION 

The  Penn.  State  College.  Industrial  Engineering  Dept. 

Instruction  Card  for  Students.  Sheet  No.  1. 

Description  of  Operation,  Laying  out  Centers  and  Turning  Eccentric. 
Name  of  Exercise.     Eccentric.     Drawing  No.  503 


Item 

Detailed  instructions 

Time 

1 

Change  cards. 

2 

Learn  what  is  to  be  done. 

3 

Chip  fins  or  gate  from  casting. 

4 

Grind  scale  from  end  of  piece. 

5 

Get  V  blocks  and  place  on  surface  plate. 

6 

Put  piece  in  V  blocks. 

7 

Chalk  ends  of  piece. 

8 

Find  approximate  center  with  surface  gage. 

9 

Scribe  line  across  both  ends  with  surface  gage. 
(Say  line  A). 

10 

Use   the   square   and   draw   line   intersecting   the 
scribed  one  (Say  B). 

11 

Pass  the  piece  through  180°,  square  line  B  with 
square. 

12 

Scribe  second  line  on  one  end  lightly  (Say  line  C). 

13 

Reset  surface  gage  midway  between  A  and  C. 

14 

Scribe  a  sharp  line  across  both  ends  (Say  line  E). 

' 

15 

Turn  piece  through  180°. 

16 

Make  line  A  come  straight  with  square. 

17 

Scribe  line  across  both  ends  of  piece. 

FIG.  86.— First  page  of  a  "typical  Instruction  Card."     8  1/2X10  1/2  white 
mimeograph  paper. 


PLANNING  AND  SUPERVISING  PRODUCTION 


209 


quantity  manufacture  of  small  parts,  together  with  the  manu- 
facturing quantity.  The  balance  of  stores  clerk  also  indicates 
what  requisitions  for  purchased  material  should  be  issued,  and 
sends  the  material  order  slips,  with  the  information  indicated, 
back  to  the  Route  Clerk.  In  this  way  all  orders  on  storeroom 
are  written  out  in  correct  form  beforehand,  and  mechanics  do 
not  lose  any  time  in  writing  out  such  orders  or  waiting  for  them 
to  be  written.  These  orders  and  all  other  papers  referred  to  as 


The  Penn.    State  Collage                            Industrial  Engineering  Dept. 

Tool  List                                                                                  Drawing  No.  503 

Description  of  Operation.      Laying  Out  Centers  and  Turning  Eccentric 

Pieces 

Name 

Size 

Tool  Symbol 

Note:    This  exercise  must  be  drilled  and  countersunk  on 
speed  lathe  equipped  for  this  purpose. 

• 

1 

Surface  gauge 

12" 

M.G.U.S. 

1 

Square 

6" 

M.L.T. 

2 

V  Blocks 

C.S.V. 

1 

Dividers 

6" 

M.C.D.S. 

1 

Scale 

6" 

M.S.S. 

1 

Carrier 

194" 

C.C.S.N. 

1 

Turning  Tool 

H" 

P.R.S.C. 

1 

Side             >? 

H" 

P.U.S.G. 

1 

Finishing    » 

5/8" 

P.S.F. 

FIG.  87. — Typical  "tool  list"  to  accompany  "instruction    card."     81/2X 
10  1/2  white  mimeograph  paper. 

having  come  from  the  drafting  department  and  referred  to  here- 
after as  being  written  out  in  the  production  department  are 
stored  in  a  portfolio  of  fiber-board  paper  in  which  pockets  of 
proper  size  are  prepared  to  hold  every  type  of  paper  necessary 
for  the  order. 

216.  Instruction  Cards. — The  route  clerk  passes  all  papers 
connected  with  the  order  over  to  the  next  individual  in  the 
Production  Department  who  has  to  deal  with  them — namely, 

14 


210      FACTORY.ORGANIZATION  AND  ADMINISTRATION 

the  Instruction  Card  Clerk.  This  man  must  be  able  to  specify 
in  minute  detail  each  step  to  be  taken  to  perform  every  opera- 
tion. He  writes  out  these  instruction  cards  for  each  piece  and 
every  operation,  as  well  as  a  tool  list  to  accompany  each  instruc- 
tion card.  He  also  fills  out  a  work  order  or  time-card  for  each 
part  of  the  process  that  is  to  be  done  by  a  separate  workman, 
and  for  each  work  order  or  time-card  he  prepares  a  detailed 
instruction  card  as  heretofore  indicated.  He  turns  the  time-cards 
over  to  the  rate-fixing  clerk,  together  with  all  other  papers  in  the 
order  portfolio. 

Fig.  86  shows  an  example  of  the  instruction  card  as  used  at  the 
Pennsylvania  State  College  Department  of  Industrial  Engineer- 
ing. Fig.  87  is  an  example  of  the  tool  list  that  accompanies  the 
instruction  card. 

217.  Rate -fixing  or  Time  Clerk. — This  clerk  affixes  the  standard 
times  in  which  the  elementary  steps  indicated  are  to  be  performed, 
also  any  premiums,  bonuses  or  piece  rates.     The  non-clerical  or 
research  work  of  rate  fixing  is  described  in  a  later  chapter  on  this 
subject. 

218.  Order-of-work  Clerk. — The  order-of-work  clerk  receives 
from  the  rate-fixing  clerk  the  order  portfolio  containing  all  the 
papers  heretofore  indicated.     He  must  designate  the  order  of 
precedence  of  the  various  work  orders.     He  has  charge  of  the 
Main  Bulletin  Board  in  the  Planning  Department  office,  and 
the  local  departmental  bulletin  boards  in  the  shops,  each  board 
bearing  hooks  on  which  are  cards  designating  the  work  for  each 
man  and  each  machine  in  advance.     He  sends  all  papers  on  to 
the  Production  or  Tracing  Clerk. 

219.  Production  or  Tracing  Clerk. — This  clerk  writes  out  or 
has  assistants  write  out  any  tracing  tags  or  follower-books  which 
are  to  accompany  material  through  the  shop.     He  sees  that  all 
the  papers  he  has  received  go  to  the  proper  persons  in  the  shop. 

The  tracing  function  of  the  production  department  involves 
the  following  up  of  a  number  of  distinct  sets  of  activity  by  means 
of  records  and  processes  that  have  to  be  adapted  to  each  set. 

220.  Tracing  Individual  Parts. — A  record  on  which  track  may 
be  kept  of  the  individual  part  production  orders  is  shown  in  Fig. 
88.     This  record  is  arranged  by  part  numbers  and  covers  only 
live  orders  in  the  shop,  a  separate  tracing  record  sheet  for  each 
separate  production  order  for  a  given  mark  number.     For  in- 
stance, there  may  be  three  live  production  orders  in  the  shop 


PLANNING  AND  SUPERVISING  PRODUCTION 


211 


issued  at  various  times  for  stock  lots  of  a  given  mark  number. 
Then  there  will  be  three  of  these  tracing  sheets  filed  back  of  that 
mark  number. 

The  tracing  sheet  bears  a  heading  giving  the  necessary  infor- 
mation as  to  name  of  part,  drawing  number,  pattern  number, 


TRACING  AND  ROUTE  SHEET  FOR  INDIVIDUAL  PART 

Part  f 
Production  Or 
Date  of  Productior 

Nam*»  of  P^rt 

PRODUCTION  ORDERS: 

Jup-|hfir 

Jftr  Nn, 

i  Ordfir 

i 

Drawing  Number                                                   Pattp 

rn  Number  

Matflrlal                                                 NO    Wanted 

Drawincr  Finished 

<D 

§ 

c 
o 

ctf 

<D 
Q. 

O 

Inspection 

Pattern 

Material 

DETAILED  OPERATIONS   AS   FOLLOWS: 
Inspection  in  Castings  Wamhnnsfi 

Plane 

Lay   Out 

Drill 

• 

(etc.-) 

FIG.  88. — Form  used  for  keeping  record  in  production  department  office 
of  progress  of  each  part  or  lot  of  components.  White  bond  paper,  81/2 
inches  wide,  11  inches  high. 


material,  and  number  wanted.  It  then  bears  a  number  of  data 
common  to  all  tracing  sheets,  concerning  the  drawing,  pattern, 
and  material,  after  which  follows  a  list  of  departmental  opera- 
tions or  routing  which  will  be  different  for  each  piece.  Opposite 
these  lists  of  steps  and  operations  involved  in  getting  out  the  lot 
of  parts  are  three  columns,  headed  respectively,  "Move,"  "Op- 


212      FACTORY  ORGANIZATION  AND  ADMINISTRATION 


I  have   this  day  finished 
following  operations  on 


the 


Mark  No. . 
Production  Order  No. 


and  sent 

to 

No.  Pieces  Received. 
No.  Pieces  sent  on 


Pieces 
.  Dept. 


eration,"  and  " Inspection."  A  vertical  pencil  mark  is  drawn 
down  through  the  column  headed  "Move,"  as  soon  as  the  item 
has  reached  the  department  indicated.  As  soon  as  the  depart- 
ment has  performed  its  operation,  a  similar  vertical  pencil  mark 
is  drawn  in  the  " Operation"  column,  and  as  soon  as  the  work 
of  that  department  has  been  inspected,  a  similar  vertical  pencil 
mark  is  inserted  in  the  "Inspection"  column. 

The  keeping  up  of  the  tracing  record  involves  the  standardiz- 
ing of  the  routing  where  possible,  though  this  is  not  indispensable, 
and  a  system  of  prompt  re- 
ports of  all  work  finished  in 
each  department,  which  re- 
ports can  be  arranged  for  by 
means  of  perforated  coupons 
on  the  tracing  tag  accom- 
panying each  lot;  or  a  sepa- 
rate slip  may  be  used  notifying 
the  production  department  or 
head  tracer  of  each  inter-de- 
partmental movement  of  a  lot 
of  parts.  A  form  for  this  pur- 
pose is  shown  in  Fig.  89. 

Another  method  is  to  have       FIQ  89>_Foreman>s   message  to 
every   workman's    change  of    tracer  in  production  department, 
job  approved  or  clock  stamped    Light   green   paper,   4  inches  wide,  6 
at  the  window  of  an  office  in    inches  high, 
which  the  man  in  charge  of 

the  tracing  records  receives  these  time  slips  every  time  a  man 
changes  jobs. 

221.  Moving  Work  in  Process.— The  jurisdiction  over  the  mov- 
ing of  parts  in  process  from  one  department  to  another  may  be 
made  a  function  of  the  production  department,  such  transfer 
of  parts  being  dependent  on  separate  instruction  memoranda, 
issued  to  a  head  stock-mover  by  means  of  a  form  similar  to  that 
shown  in  Fig.  90.  This  slip  tells  the  head  stock-mover  from 
which  department  he  is  to  take  a  lot,  and  to  which  department 
he  is  to  deliver  it.  When  he  has  executed  the  order  given  him 
in  this  slip,  he  signs  it  at  the  lower  right-hand  corner  after  the 
words,  "I  have  moved  the  material  checked  above,"  and  returns 
the  slip  to  the  production  department's  head  tracer  or  transfer 
clerk. 


For  shortage  see  Shortage 

Report  No. 

Date— 

(Signed) 

Foreman 


Dept. 


PLANNING  AND  SUPERVISING  PRODUCTION 


213 


Similarly,  separate  inspection  slips  may  be  used  for  tracing 
inspection,  in  case  inspection  of  processes  before  final  completion 
is  the  method  of  inspection  employed. 

A  further  refinement  of  the  tracing  of  the  individual  production 
orders  which  is  possible  in  some  shops  consists  of  the  securing  of 
a  promise  date  for  completion  of  each  operation  and  awarding 
a  bonus  for  the  highest  percentages  of  living  up  to  estimated 
dates  of  completion.  The  record  of  total  estimated  time  in  any 
given  department,  and  various  deferred  promises,  may  be  kept 


IN 

ORDER  NUMBER 

DATE 

MOVE  THE   FOLLOWING  MATERIALS  AS  DIRECTED 

DESCRIPTION  OR  SYMBOL 

FROM 

FLOOR 

TO 

FLOOR 

woman 

N'S  NAME 

ft 

lAN'S  NO 

ROUTE 
SHEETS 

PAY 
SHEETS 

COST 
SHEET 

1  HAVE  MOVED  THE  MATERIALS  CHECKED  ABOVE 

RlfiNFD 

FIG.  90. — Instructions  from  production  department  to  move  stock 
from  department  to  department.  Manila  card,  4  inches  wide,  4  inches 
high. 

on  the  bottom  of  the  tracing  and  route  sheet  for  individual  part 
production  orders  (Fig.  88),  the  form  being  modified  so  as  to 
carry  the  additional  data.  Columns  must  be  provided  for  the 
estimates  of  total  hours  of  labor  to  do  the  jobs  in  any  one  depart- 
ment, also  a  column  for  first  promise  date  of  completion  and 
further  columns  for  deferred  promises. 

222.  Rush  Orders. — In  case  it  is  desired  to  give  especial  pref- 
erence to  certain  pieces,  a  "Rush  Order"  slip  similar  to  Fig.  91 
may  be  used.  Such  "Rush  Order"  may  be  written  in  duplicate, 


214      FACTORY  ORGANIZATION  AND  ADMINISTRATION 

one  set  being  kept  on  file  in  the  production  department,  the  other 
copies  going  to  the  shop. 

223.  Tracing  Groups  of  Parts  or  Complete  Machines.— Thus 
far  the  methods  described  for  tracing  have  referred  only  to  the 


RUSH  ORDER 


NEEDED  FOR  ORDER  NO. 


Following  parts  covered  by  orders  now  in  shop  are  needed 
at  once. 

If  this  order  is  stamped  "Rush"  in  red,  it  is  especially 
important  that  extra  preference  be  given. 

Regular  "split"  or  "detachment"  tag  must  be  made  out  to 
cover  any  work  advanced  ahead  of  the  full  amount  by  reason  of 
this  rush  slip.  Foreman's  copy  of  this  slip  must  go  from  one 
foreman  to  next  with  the  parts  rushed. 


NO.  PCS.  NEEDED  AT  ONCE 


TO  BE  ADVANCED  FROM  FOLLOWING  ORDER- 
DATE  TAG  WRITTEN  ORDER  NO. 


No.  PCS.  STARTED 


(S«t  Back  of  Tag  lor  Detachments) 

ARTICLE 


DELIVK.R    TO 


Ready 


Drawing  No. 


Mat'l  Del'd  to  Shop 


To  be  Finished. 


Shop  Depts.  Involved 


Promise  Dates  of  Completioft 


FIG.  91. — Rush  order  slip  sent  to  shop  to  hasten  one  or  more  pieces 
being  made  on  a  stock  order  for  components.  Thin  white  paper  for  easy 
carbon  manifolding,  4  inches  wide,  6  inches  high. 

class  of  shop  orders  which  call  for  a  quantity  of  a  single  piece. 
The  tracing  through  of  an  order  for  one  or  more  completely 
assembled  groups  of  parts  constituting  a  complete  machine 
or  several  machines,  or  other  articles  consisting  of  a  consider- 
able number  of  parts,  can  be  taken  care  of  by  binding  in  with 


PLANNING  AND  SUPERVISING  PRODUCTION 


215 


M 

CL,  W 
O  <J 

$2 

s£ 

II! 

^ 

ll 

ill* 

TRACING  SHEET. 

1 

III 

iVj 

RECEIVING  DEPT.  ENTRIES 

CASTINGS 

Pates  and 
Amounts  del'd 
from  Foundries 

Sfl 

«l  » 
*£« 

CASTINGS  AND 

PATTERNS 

MH 

si 

ii4 

fc 

If 

STORES  RECORD  DEPT,  ENTRIES 

Purchased  Material  except"  Castings 

i?"H 

«rt     5(2 

ft  I 

^   0 

d  I  o 

A  O55 

fc 

It 

Parts  made  on 
Stock  Orders  to  be 
applied  to  this  13.  M. 

isii 

i! 

0 

Ml 

«*? 
H^ 

Jtiaiaidraoo  01  tn9>i  S* 
uoos  SB  nmnioo  stq» 
uj  ami  q»«3  jpsqo 

I  § 


.-2 

•4-3 

C         *H 

0     O 

1 1 


®    bC 
73  T3 


O 

3 

T; 


pi 

o 

"c 

fc£ 

_C 

^3 
d 
IS 


the  bill  of  material  a 
"Tracing  Sheet"  form. 
Fig.  92  is  an  example 
of  this  kind  of  a  form. 
The  first  column  in 
this  form  is  headed 
"Tracer  only"  and  is 
to  be  checked  when 
the  item  on  the  cor- 
responding line  in  the 
bill  of  material  has 
been  completely  dis- 
posed of.  The  next 
group  of  columns  re- 
fers to  finished  parts, 
the  first  three  referring 
to  parts  made  in  the 
shop,  and  the  remain- 
der of  the  group  to 
parts  purchased  out- 
side, excepting  cast- 
ings. The  headings  in 
the  columns  referring 
to  manufactured  parts 
made  on  stock  orders 
give  data  of  stock  or- 
der, its  number,  and 
the  number  of  pieces. 
The  columns  referring 
to  purchased  parts 
other  than  castings 
cover  date  of  requisi- 
tion on  purchasing  de- 
partment, the  requisi- 
tion number,  the  pur- 
chase  department 
number,  its  date,  and 
date  of  receipt  of  ma- 
terial. 

The  next  group  of 
columns  refers  to  cast- 


216      FACTORY  ORGANIZATION  AND  ADMINISTRATION 

ings.  The  left-hand  group  under  this  heading  gives  dates  of  req- 
uisitions for  making  patterns  (the  shop  in  question  having  its 
patterns  made  outside  by  a  pattern  job  shop),  the  number  of 
the  pattern  requisition,  the  purchase  department  order  number, 
its  date,  and  date  pattern  was  delivered  to  foundry.  If  the  pat- 
tern is  already  made  a  horizontal  line  is  drawn  through  all  col- 
umns excepting  the  one  headed  "  Pattern  delivered  to  foundry." 

The  next  group  of  columns  gives  the  date  and  number  of  the 
purchase  order  for  castings;  and  the  dates  and  amounts  delivered 
from  the  foundries.  The  next  columns  headed,  "Tags,"  refer 
to  the  tags  accompanying  material  belonging  to  shop  production 
orders  in  the  shop.  Entries  are  made  in  these  columns  from  each 
day's  tags,  as  they  are  written,  indicating  the  date  that  the  tags 
to  go  with  the  material  have  been  written,  also  the  date  that 
the  material  is  ready.  In  case  material  is  not  ready  by  reason 
of  castings  or  other  raw  material  not  being  in,  the  tags  are  kept 
in  waiting  boxes,  either  in  the  production  or  the  receiving  depart- 
ment, and  proper  date  entries  put  into  the  column  headed  "Date 
material  ready"  as  soon  as  the  tags  are  ready  to  be  lifted  from 
the  waiting  boxes  and  sent  to  the  shop  by  reason  of  the  arrival 
of  the  needed  material. 

The  last  two  columns  refer  to  drawings  and  to  manufactured 
parts.  As  soon  as  drawings  are  known  to  be  ready,  that  column 
is  dated,  and  as  soon  as  parts  manufactured  on  shop  production 
orders  are  known  to  be  finished  a  date  is  entered  in  the  last 
column. 

224.  Hastening  Purchased  Items. — Fig.  93  shows  a  form  used 
in  urging  the  purchasing  department  to  hasten  material  urgently 
needed.  The  form  is  self-explanatory.  Carbon  copies  are  filed 
in  the  production  department,  back  of  guide  cards,  designating 
order  numbers. 

Weekly  meetings  for  the  discussion  of  production  problems 
are  an  absolutely  essential  accompaniment  to  systematic  control 
of  production.  At  such  meetings  there  should  be  present  not 
only  shop  foremen,  but  heads  of  all  departments  whose  work 
deals  with  matters  related  to  production,  such  as  head  of  stores 
record  department,  head  of  purchasing  department,  and  in  some 
cases  heads  of  sales  department  or  some  representative  of  the 
department.  At  these  meetings  summaries  are  presented  detail- 
ing items  on  which  promises  of  delivery  have  not  been  realized. 
Such  lists  may  be  advantageously  made  in  manifold,  a  copy  being 


PLANNING  AND  SUPERVISING  PRODUCTION  217 

given  to  each  person  concerned  at  some  time  previous  to  the 
holding  of  the  meeting  at  which  these  questions  are  discussed. 

A  further  refinement  possible  in  some  factories  is  the  making 
of  graphical  curves,  showing  the  hours  work  to  be  accomplished 
in  a  given  department  during  the  next  four,  eight,  or  more  weeks 
plotted  as  one  curve ;  also  the  number  of  available  working  hours 
in  that  department  during  the  same  period,  based  on  the  product 
of  the  number  of  employees  multiplied  by  the  number  of  hours 
per  week  that  each  man  works. 


MATERIAL  URGENTLY  NEEDED  FOR  PRODUCTION  ORDER  No. 


DAXE  Of.  THIS  NOTICE   PURCHASE  ORDER  NO.   PURCHASE  ORDER  DATE  PATTERN  NO. 

NAME  OF  PART' 


QUANTITY  TO   BE  RUSHED! 


PURCHASED  FROM 


REMARKS:BY  TRACING  DEFT.':  ABOVEIWANTED  BY  EXPRESS-FREIGHT 


IS_TELEGRAPHIC  INFORMATION   REQUIRED  AS  TO   DELIVERY? 


(SIGNED). 


PURCHASING  DEPT'S  REPLY:  (TRACING  DEPT.  TO  COPY  THIS  ON  THEIR  copy  AND  THEN  RETURN 

ORIGINAL  TO   PURCHASING    DEPT.  WHO  WILL    KEEP. IT  ON    FILE  AND   FOLLOWED  UP  UNTIL  FINAL  DELIVERY) 


FIG.  93. — Form  used  by  production  department  in  urging  purchasing 
department  to  hasten  delivery  of  most  badly  needed  items.  Medium  weight 
manila  paper,  6  inches  wide,  4  inches  high. 

225.  Weekly  Report  for  Foremen's  Meeting.— A  form  for 
weekly  report  at  foremen's  meeting  is  shown  in  Fig.  94.  Such 
report  is  useful  only  when  it  is  made  the  basis  of  systematic 
and  determined  united  action  on  the  part  of  all  concerned. 
The  mere  rendering  of  a  weekly  report  to  a  superintendent  or 
works  manager  soon  becomes  a  perfunctory  matter  of  but  little 
value. 

It  will  be  readily  seen  that  the  production  department  as 
outlined  requires  for  its  head  a  man  of  firmness  as  well  as  amia- 
bility, and  that  each  of  his  record  clerks  must  be  decidedly  high- 
grade  men  from  a  standpoint  of  accuracy  and  knowledge  of  shop 
routine. 


218      FACTORY  ORGANIZATION  AND  ADMINISTRATION 

226.  Shop  Tags.— Reference  has  been  made  several  times  to 
the  shop  tag  or  tracing  tag  which  accompanies  a  lot  of  goods 
through  the  shop.  This  tag  is  written  as  soon  as  the  shop  pro- 


APPARATUS 
ORDER   RECEIVED                                                                            CONTRACT 

1 

TO  BE  DELIVERED 

PRELIM.  INFO 

M. 

1  i         DRAV 

INGS 

BILLS  OF  MAT 

ERIAL 

COMPLETE  IN 

-ORM. 

ADDITIONAL  1 

FORM. 

M             DRAWINGS 

SPECIFICATIONS 

REVISED  INFORM. 

n     BILLS'  OF  MAT. 

ti         DRAWINGS 

PATTERNS  ORDERED 

PATTERNS  FIN. 

it           NO8.  CHANGED 

IRON    CASTINGS  REC'D 

STEEL          i  ) 

OR'D 

STEEL          « 

REC'D 

BRASS           i  I 

TEST  PIECES 

NO  OR  YES 

M               .,         PF 

OMISED 

it         M      R 

C'D 

SUPPLIES  OR' 

, 

tl         PR< 
•  '          RE< 

MI8ED 
'D 

FIRST  SHIP'G 

PROMISE 

DELAYED  BY 

SECOND  SHIP' 

G  PROMISE 

DELAYED  BY 

SHIPPED 

ERECTED 

SPECIAL                                                   CONTRACT 

FIG.  94. — Form  for  weekly  report  at  foremen's  meeting, 
inches  wide,  11  inches  high. 


White  paper,  8  1/2 


duction  order  is  written,  and  is  issued  to  the  shop  only  when  the 
material  is  ready.  A  form  for  such  tracing  tag  is  shown  in 
Fig.  95. 


PLANNING  AND  SUPERVISING  PRODUCTION 


219 


The  reverse  of  the  tag  is  shown  in  Fig.  96.  It  is  usually  advis- 
able to  use  different  colored  tags  for  different  classes  or  series  of 
orders;  for  instance,  a  buff-colored  tag  may  be  used  for  bill  of 
material  items,  such  as  special  castings,  etc.,  which  would  not 
be  made  in  stock-order  lots.  A  yellow  tag  might  be  used  for 
stock  orders,  a  salmon  tag  for  tool  department  orders,  a  manila 
tag  for  items  to  be  charged  to  standing  non-productive  orders, 

a  blue  tag  for  plant  addition 
orders,  etc.  The  form  shown 
contains  spaces  for  insertion 
of  the  following:  number  of 
pieces  started,  the  material, 
the  name  of  the  article,  to 
what  department  it  is  to  be 
delivered,  the  mark  number, 
drawing  number,  pattern 
number,  when  material  was 
ready,  when  it  was  delivered 
to  shop,  when  it  is  to  be  fin- 
ished, and  a  list  of  the  opera- 
tions to  be  done,  such  list 
being  written  in  advance  on 
the  tag,  together  with  depart- 
ment which  is  to  do  each 
operation,  and  the  time  al- 
lowed for  each  of  the  opera- 
tions. Where  detailed  in- 
struction cards  are  supplied, 
the  tag  need  contain  only  the 
general  routing,  and  refer- 
ence to  instruction  card  and 
tool  lists  by  number. 

At  the  bottom  of  the  tag 
is  the  "Warehouse  Coupon/' 

or  receipt,  containing  the  same  heading  items  as  the  main  tag,  and 
bearing  on  its  reverse  following  instructions:  "This  coupon  must 
be  signed  by  party  receiving  material  and  proper  date  entries 
made  in  spaces  headed  'Material  delivered  to  shop,'  on  both 
main  tag  and  coupon.  Coupon  must  then  be  immediately  de- 
tached and  returned  to  department  which  issued  material." 
227.  Detachments  or  Split  Lots. — On  the  reverse  of  the  tag 


/FOR   STOCK    /•""X  ORDER                          \ 
DATE  TAG  WRITTEN   (   O  )          ORDER  No.                  \ 

NO.  PCS.  STARTED                                  MATERIAL 

(  SEE  SACK  OF  TAS  FOR  DETACHMENTS) 

DELIVER  TO 

MARK    NO.                          DRAWING    NO. 

PATTERN    NO. 

MATERIAL    READY          MAT'L  DEL'D   TO   S 

HOP        TO    BE   FINISHED 

OPERATIONS                                 DE 

PT.               HOURS  T   MEMINUTES 

- 

.  ,       ,               

—  •  

1  [  1 

AFTER  ABOVE  OPERATIONS  COMPLETED  01 

LIVEH   TO  INSPECTOR 

WAREHOUSE  COUPON 

DATE  TAG  WRITTEN                                              ORDER  NO. 

NO.   PCS.  STARTED                                      MATERIAL 

ARTICLE 

MARK    NO.                            DRAWING    NO. 

PATTERN    NO. 

MATERIAL  READY         MAT'L  DEL'D  TO  S 

HOP       TO  BE  FINISHED 

WEIGHT 

(blgi 

ature  of  Party  Receiving  ) 

Fro.  95. 

NO.  PCS.   DETACHED 


BALANCE    REMAIH 


Partial  Deliveries  to  i 


DATE  PART'L  DEL'Y 


NO.  PCS.  DELIVERED 


BALANCE  TO  FOLLOW 


PARTIAL  DELIVERIES  TO  CASTINGS    WAREHOUSE  AS   FOLLOWS 


NO.DELIVERED 


220      FACTORY  ORGANIZATION  AND  ADMINISTRATION 

there  are  provisions  made  for  splitting  the  lot  or  making  detach- 
ments in  the  shop.  For  such  detachments  exact  copies  are  made 
of  the  original  tag,  excepting  as  to  number  of  pieces,  on  a  "  Detach- 
ment or  Partial  Delivery  Tag."  This  tag  is  just  like  the  regular 
tag,  excepting  that  instead  of  being  printed  in  black  type  it  is 
printed  in  red  type,  which  immediately  calls  attention  to  the  fact 
that  the  lot  is  a  "Split  lot" 
or  "Detachment." 

The  tag  shown  provides 
for  the  possibility  of  five  dis- 
tinct detachments  being  made 
by  the  shop,  owing  to  the 
rushing  of  individual  lots  on 
a  stock  order,  giving  the  date 
of  the  detachment,  the  num- 
ber of  pieces  detached  and 
advanced,  and  the  balance  re- 
maining with  the  original  tag. 

Next  follows  a  record  of 
partial  deliveries  to  the  shop 
in  case  only  part  of  the  cast- 
ings or  other  raw  material 
have  arrived,  and  it  is  decided 
to  send  this  partial  supply 
out  into  the  shop.  In  this 
case  the  receiving  department 
furnishes  the  production  de- 
partment the  information  of 
receipt  of  only  part  of  the 
material,  and  the  production, 
department  decides  whether 
or  not  to  have  the  partial  de- 
livery tags  written,  and  retain 
the  main  tag  in  the  receiving 
department  office  until  the 


NO.TO  FOLLOW 


INSPECTOR'S  REPORT 


DATE  INSPECTED 


NO.  REJECTED 


NO.  ACCEPTED 


FINISHED  STORE  ROOM  RECEIPT 


DATE  RECEIVED 


AMOUNT  RECEIVED 


BALANCE  IN  STOCK 


FINISHED  STORES   8. 


THIS  COUPON  MUST  BE  SIGNED  BY  PARTY 
RECEIVING  MATERIAL,  AND  PROPER  DATE 
ENTRIES  MADE  IN  SPACES  HEADED  "MAT'L 
DEL'D  TO  SHOP"  ON  BOTH,  MA|N  TAG  AND 
COUPON,  MUST  THEN  BE  IMMEDIATELY  DE- 
TACHED AND  RETURNED  TO  DEPARTMENT 
WHICH  ISSUED  MATERIAL. 


FIG.  96. — Reverse  of  form  shown 
in  Fig.  60,  showing  "splits"  or  "detach- 
ments," also  inspector's  and  storeroom 
reports. 


last  lot  is  received  by  them  and  delivered  to  the  shop. 

In  case  the  receiving  department  is  accumulating  raw  material 
by  sending  it  to  stores  until  the  full  supply  is  in,  which  would 
be  the  normal  condition,  it  being  preferred  to  send  out  the  regular 
manufacturing  quantity,  the  next  set  of  spaces  is  used,  which 
is  headed,  "Partial  deliveries  to  castings  warehouse  as  follows, 


PLANNING  AND  SUPERVISING  PRODUCTION  221 

for  which  no  partial  delivery  tags  issued."  This  set  of  mem- 
oranda keep  the  receiving  department  posted  as  to  the  number 
of  castings  they  have  received  and  must  expect  before  they 
may  let  the  tag  go  out. 

Next  follows  a  space  for  inspector's  report  which  is  filled 
in  after  all  the  operations  have  been  done,  and  the  pieces  come 
to  the  inspection  department  for  approval  before  being  turned 
into  stores. 

Then  follows  an  indorsement  by  the  storeroom,  giving  date 
and  amount  received  with  the  tag,  also  the  balance  in  stock, 
including  this  lot  and  by  whom  counted,  furnishing  a  balance 
by  actual  count.  The  tag  is  sent  from  the  storeroom  to  the 
stores  record  clerk,  who  posts  it  in  his  stores  record  of  manu- 
factured finished  parts. 

228.  Transfer    Clerk. — In    several    successful   manufacturing 
establishments,  the  head  tracer  of  the  production  department  has 
his  headquarters  in  the  very  center  of  the  shop.     He  has  charge 
of  all  of  the  "stock-movers,"  or  truckers,  who  haul  work  in 
process  from  one  department  to  another,  and  whenever  such 
interdepartmental  transfer  takes  place  the  stock-mover  passes 
with  his  truck  and  its  load  of  work  in  process  and  the  accompany- 
ing shop  tags  past  this  head  tracer's  or  " transfer  clerk's"  post, 
stopping  there  so  that  the  transfer  clerk  may  get  the  record.     In 
this  way  the  head  tracer  or  transfer  clerk  actually  sees  the  pieces 
themselves  as  they  go  from  department   to  department,    and 
can  shift  cards  in  index  boxes  or  in  grooves,  or  hang  tags  or 
checks  on  hooks  in  a  manner  indicating  the  travel  of  each  lot  of 
pieces  of  work  in  process,  from  department  to  department,  so 
that  he  has  positive  and  instant  information  as  to  the  exact 
location  of  each  lot.     From  these  card  indexes  or  grooved  trays 
or  check-boards,  the  tracing  department  can  then  accumulate 
for  collective  groups  or  complete  machines  the  record  of  progress, 
posting  same  on  a  bill  of  material  or  other  record  form. 

229.  Estimate   of    Times   of    Completion. — After    a   tracing 
system  is  in  thorough  working  order,  and  it  is  possible  to  tell  the 
exact  location  of  any  piece  or  group  of  pieces,  it  is  but  a  step 
further  to  inaugurate  a  system  of  estimated  times  of  completion 
of  each  lot  in  each  department.     One  of  the  large  electric  manu- 
facturing companies  has  brought  this  system  of  promised  dates 
of  completion  to  a  state  of  high  efficiency,  by  keeping  a  monthly 
record  of  each  foreman's  percentage  of  correctness  in  estimating 


222      FACTORY  ORGANIZATION  AND  ADMINISTRATION 

the  time  of  completion.  Prizes  and  promotions  are  accorded 
for  the  highest  percentages,  and  whereas  at  the  beginning  of  the 
system  the  highest  percentage  was  below  60,  after  six  months' 
operation  a  number  of  foremen  were  able  to  bring  their  percent- 
ages over  90,  a  state  of  affairs  which  seems  almost  incredible  to 
the  ordinary  factory  superintendent. 

229a.  Efficient  Scheduling. — It  must  always  be  borne  in  mind 
that  our  whole  production  system  fails  of  its  purpose  if,  instead 
of  actual  centralized  control,  we  instal  merely  a  paper  history  or 
duplication  of  uncontrolled  or  erratic  production.  It  is  only  a 
useless  expense  to  have  order  of  work  boards  and  assignment 
boards  and  another  record  somewhere  else  following  up  the 
ticket  changes  on  these  boards  with  beautiful  graphs  if  the  work 
done  and  its  sequence  is  not  based  on  intelligent  predetermina- 
tion. This  predetermination  is  absolutely  dependent  on  a 
knowledge  of  (1)  all  operations  necessary  to  do  on  each  com- 
ponent; (2)  the  machinery  equipment,  small  tools  and  fixtures 
necessary  and  available  for  each  operation;  (3)  the  time  it  takes 
to  do  each  operation  including  inspection  and  moves;  (4)  the 
remoteness  from  assembly  if  there  is  assembly,  at  which  each 
component  must  be  started  in  order  to  secure  availability  of  all 
components  at  assembly  time;  (5)  a  graphical  lay-out  of  all 
available  equipment  and  men  each  day  with  a  uniform  dis- 
tribution of  the  work  so  as  to  secureuni  form  employment  of  the 
proper  number  of  men  and  machines  necessary  to  carry  out  the 
predetermined  manufacturing  schedule;  (6)  a  tie-in  of  this  manu- 
facturing schedule  with  financial  scheduling  so  as  to  avoid 
paying  out  more  money  for  wages,  tools  and  materials  than  can 
be  afforded,  and  thus  avoid  piling  up  a  high  inventory  of  work 
in  process  at  seasons  when  there  is  difficulty  in  raising  cash. 
f  The  segregation  of  scheduling  and  planning  into  distinct 
V  divisions,  while  it  may  possess  some  advantages  in  a  large 
)  organization,  is  always  fraught  with  dangers  of  duplication  of 
/  such  records  as  balance  of  stores  and  balance  of  work  in  process 
\  and  times  required  for  various  operations,  which  duplication  of 
'  records  is  a  needless  over-head  burden  that  could  be  avoided 
by  merging  scheduling  and  planning  into  a  single  division. 

Finally  the  entire  production  system  will  fail  unless  actual 
work  done  in  the  shop  is  controlled  by  the  head  of  the  production 
department.  There  are  three  choices  as  to  who  shall  control 


PLANNING  AND  SUPERVISING  PRODUCTION  223 

the  actual  shop  production:  (1)  the  old-time  ruthless  driver  type 
of  superintendent  who  is  apt  to  look  on  the  production  system  as 
a  plaything  of  the  boss,  to  be  tolerated  with  apparent  enthusiasm 
but  with  plenty  of  internal  contemptuous  mental  reservations; 
(2)  the  system  man  with  no  human  leadership;  (3)  a  real  human 
engineer,  technically  and  economically  educated  who  is  alert 
but  not  a  driver.  I  have  seen  each  of  the  three  types.  The 
first  actually  has  the  confidence  of  the  management  until  he 
steers  the  business  into  financial  reefs;  then  they  veer  towards 
the  second  type,  and  finally  the  choice  will  fall  on  a  man  of  the 
third  type.  A  man  of  the  second  type  will  often  work  for  and 
under  a  man  of  type  (1).  A  man  of  the  third  type  cannot  work 
under  type  (1). 

REFERENCES 

TAYLOR:  "Shop  Management,"  Pars.  258-311. 
GILBRETH:  "Primer  of  Scientific  Management,"  Chapter  III. 
PARKHURST:  "Applied  Methods  of  Scientific  Management,"  Chapter  III. 
DUNCAN:  " Industrial  Management,"  Chapters  VII  to  IX. 
THOMPSON:  "Scientific  Management,"  Pages  313  to  380. 


CHAPTER  XVIII 
FOUNDRY  SYSTEMS 

230.  Castings  Requisitions. — Inasmuch  as  the  foundry  is  in 
many  establishments  an  integral  part  of  the  factory,  the  follow- 
ing outline  of  foundry  systems  is  given,  more  with  a  view  of  the 
foundry  as  a  shop  department  than  of  the  foundry  as  a  job  shop. 

The  requisition  for  castings  emanates  from  a  stores  record 
clerk  who  initiates  such  requisition  for  one  of  the  following  rea- 
sons: 1.  As  he  enters  reservations  for  production  orders  or  ship- 
ping orders,  he  finds  that  his  balance  on  hand,  deducting  reserve, 
falls  below  the  minimum  stock  as  specified  on  his  stock  sheet. 
He  thereupon  writes  out  a  castings  requisition.  Where  the  estab- 
lishment has  no  foundry  of  its  own,  this  castings  requisition  goes 
to  the  purchasing  department.  Where  the  foundry  is  a  shop 
department,  this  requisition  is  sent  to  the  foundry  foreman. 


CASTINGS 

REQUISITION.         n.TF             IM    « 

HOP  ORDER  

CLASS 

NO.    OF 
PIECES 

DESCRIPTION. 

PATTERN  No. 

DATE 
DUE 

FOUNDRY  JOB 
NO. 

,  -^ 

FIG.  97. — Requisition  to  make  castings.     White  bond  paper,  81/2  inches 
wide,  11  inches  high,  ruled  in  red  and  blue. 

Fig.  97  shows  a  form  for  such  castings  requisition.  This  requisi- 
tion bears  columns  headed  as  follows:  " Class,"  "Number  of 
Pieces,"  " Description,"  "Pattern  Number,"  "Date  Due," 
"Foundry  Job  Number."  The  foundry  foreman's  clerk  assigns 
the  foundry  job  numbers  consecutively  as  they  are  received, 
beginning  with  number  one  as  the  first  order  of 'the  year.  One 
copy  of  the  castings  requisition  is  sent  to  the  pattern  shop,  and 
two  to  the  foundry.  One  of  these  foundry  copies  is  returned  to 
the  stores  record  clerk  with  the  foundry  job  numbers  inserted. 

231.  Moulders'  and  Coremakers'  Order  Copies. — On  receipt 
of  the  castings  requisition  the  foundry  clerk  makes  out  two 

224 


FOUNDRY  SYSTEMS 


225 


similar  job  cards,  viz.,  Fig.  98,  " Moulder's  Duplicate."  and  Fig. 
99,  "  Coremaker's  Duplicate."     Both  of  these  cards  are  attached 


MOULDER'S  DUPLICATE. 

Name 

JOB  Nc 

. 

No.  of 

PCS.        - 

Date 
of  Issue 

Pat. 
Nos. 

Da1 

Due 

PC 

.e. 

s. 

No.  Pieces  Moulded. 
Include  Helpers  Number  on  Job. 

m 
0. 

6 

z 

o 

To 

o 

£ 

1 

z 

X 

FIG.  98. — Moulder's  card,  copy  of  order  to  make  castings  with  tracing 
record  on  same.     Manila  card,  5  inches  wide,  3  inches  high. 

to  the  pattern  shop's  copy  of  the  castings  requisition,  and  are 
sent  to  the  foreman  of  the  pattern  shop.  The  foreman  of  the 
pattern  shop  hands  them  to  the  pattern  carrier  with  instructions 


COREMAKER'S  DUPLICATE.                          JOB  NO. 

Oae  Piece  means  one  full  set  of  Cores  required  to  make  one  casting 
Name 

r- 

No.  Of 
PCS. 

Date                                               Pat. 
of  Issue                                              Nos. 

DC 

Due 

p< 

te. 

;s. 

No.  of  Sets  of  Cores  Made. 

5 

0 

2 

I 

0 

z 
o 

FIG.  99. — Coremaker  s  card,  copy  of  c 
record  covering  cores  made.     Manila 


to  get  the  patterns  that  these  cards  call  for.     He  tacks  the 
Moulder's  Duplicate  to  the  pattern  itself,  and  sends  the  pattern 


226     FACTORY  ORGANIZATION  AND  ADMINISTRATION 


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to  the  foundry.  In 
case  the  pattern  has  to 
be  made,  the  moulder's 
duplicate  card  is  kept 
on  file  in  the  pattern 
shop,  remaining  at- 
tached to  the  pattern 
shop's  copy  of  castings 
requisition  until  the 
pattern  is  made. 

The  core-maker's  du- 
plicate is  handed  to  the 
foreman  of  the  core- 
room. 

232.  Daily  Record  of 
Work  Done.— As  the 
foundry  work  is  com- 
pleted the  foundry 
time-keeper  collects  the 
card  orders  and  turns 
them  back  to  the  foun- 
dry clerk.  The  foundry 
clerk  makes  up,  for  his 
own  guidance  from 
these  returning  cards, 
a  daily  record  of  work 
done  (Fig.  100),  such 
record  bearing  columns 
with  the  following  head- 
ings: "Help"  (this  col- 
umn containing  check 
number  and  time  of 
moulder  and  helpers), 
"Shop  Order  No.," 
"Foundry  Job  No.," 
"Number  of  Pieces," 
"Time,"  "Weight" 
(scrap,  if  any,  being 
specified),  "Pattern 
Number, "  "  Descrip- 
tion." The  foundry 


UNDRY  SYSTEMS                                     227 

2   . 

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228     FACTORY  ORGANIZATION  AND  ADMINISTRATION 


clerk  takes  this  record  sheet  into  the  castings  cleaning-room  and 
uses  it  as  a  help  in  finding  the  castings. 

233.  Daily  Delivery  Record. — He  then  makes  out  a  delivery 
record  similar  to  Fig.  101  making  it  in  triplicate,  one  copy  going 


FOUNDRY  CONSECUTIVE  JOB  LIST. 

Date 

JOB  NO. 
D 

CASTINGS  REQUIRED. 

SHOP 

MADE                   MADE                  MADE                    MADE 

No. 

DESCRIPTION. 

Symbo 

g 

.  1 

Uau 

Hrs 

g 

Dnti 

;;•; 

--.. 

ft" 

>.-,t<- 

^ 

bate 

Irs. 

31. 

31. 

31. 

31. 

31. 

31. 

31. 

31. 

11. 

II. 

11. 

H. 

I'. 

C. 

0  - 

C. 

31. 

H. 

31. 

31. 

31. 

31. 

31. 

31. 

II. 

H. 

11. 

Jl. 

C. 

C. 

(J. 

o« 

31. 

31. 

31. 

M. 

31. 

31. 

31. 

~^- 

31. 

FIG.  102. — Foundry  clerk's  consecutive  job  list.     White  bond  paper,  81/2 
inches  wide,  11  inches  high,  ruled  in  red  and  blue. 

to  the  production  department,  one  copy  going  to  the  machine 
shop,  and  one  copy  being  retained  in  the  foundry.  The  general 
headings  on  this  foundry  delivery  record  are  "Date"  and  "Page." 


JOB  No. 


NANLE_ 


DATE 


KIND_ 


.SIZE. 


No.  Pieces  Made 


No.  Pieces  Del'd 


No.  Pieces  Lost 


Pattern  No. 


Drw'g  or  Sketch 


Shop  or  Stock 


Date  Completed 


Shop  Clerks  O.K. 


Time  must  be  checked  every  day  by  Foreman,  and  O.K'd 
upon  completion,  and  completion  notice  returned  to  office 
without  delay. 


FIG.  103. — Foundry  clerk's  tracing  card.     Gray  card,   5  inches  wide,   3 

inches  high. 

The  vertical  columns  are  headed  "Shop  Order  Number,"  and  a 
column  for  checking,  "Foundry  Job  Number,"  and  a  column  for 
checking,  "Number  of  Pieces,"  and  a  column  for  checking, 
"Weight,"  "Description"  and  "Pattern  Number."  There 


FOUNDRY  SYSTEMS 


229 


is  also  a  blank  column  at  the  extreme  left  which  is  used  for  enter- 
ing a  reference  to  subsequent  deliveries  on  the  same  order  number. 
After  filling  out  the  foundry  delivery  sheet,  the  foundry  clerk 
returns  again  to  the  castings  requisition  sheet,  and  posts  in  the 
column  headed  "Description"  the  date  of  completion  and  num- 
ber of  pieces  completed.  As  soon  as  any  one  castings  requisition 
sheet  is  filled  out  showing  that  all  items  have  been  delivered, 
this  sheet  is  retired  to  a  file  of  completed  castings  requisitions. 

234.  Consecutive  Job  List. — The  foundry  clerk  also  writes 
out  daily  a  Finding  List  or  index  sheet,  using  for  that  purpose  a 
sheet  entitled  "Foundry  Consecutive  Job  List,"  shown  in  Fig.  102. 


MATERIAL  SCRAPPED 

FPUNDRY  DEP'T. 

jOn 

PIECES 

DESCRIPTION                                   SYMBOL      Shop  Order  No.       ON  ACCOUNT 

DEFECTIVE 
CASTINGS 

MISTAKE  IN 

PF.P'T 

MADE  BY  KEY  No. 

NAME 

Time  Lost  on  Scrapped  Castings. 

State  Below  Why  Castings  Were  Lost. 

Key  No. 

Moulders 
Houra 

Help 

Core  MW 
Hours 

' 

Foreman  Will  Stamp  and  Send  to  Office. 

FIG.  104. — Record  of  defective  castings,  filed  back  of  cards  shown  in 
Fig.  68,  a  duplicate  going  to  superintendent  and  another  copy  to  production 
department.  Yellow  bond  paper,  5  inches  wide,  3  inches  high. 


The  columns  in  this  list  bear  headings  as  follows:  "Date,"  "Job 
Number,"  "Number  of  Pieces."  "Description,"  "Shop  Order 
Number,"  "Class  of  Labor"  and  "Time." 

235.  Foundry  Tracing  Card. — The  foundry  clerk  prepares 
also  each  day  a  number  of  cards  (Fig.  103)  for  the  purpose  of 
answering  any  questions  as  to  the  date  of  delivery  of  castings, 
number  of  castings  scrapped,  and  state  of  completion  of  any  job. 
These  cards  are  filed  back  of  guide  cards  showing  job  number, 
and  are  written  up  at  the  same  time  as  the  writing  up  of  the  cards 
entitled,  "Core-makers'  Duplicate,"  and  "Moulders'  Duplicate." 


230     FACTORY  ORGANIZATION  AND  ADMINISTRATION 


Entries  are  posted  on  these  cards  from  the  "  Foundry  Delivery 
Record"  (Fig.  101). 

236.  Scrapped  Material. — To  the  back  of  each  of  these  cards 
are  attached  by  "clips"  notices  of  defective  castings,  where  such 
have  occurred;  these  notices  (headed  " Material  Scrapped")  are 


NAME                                                          CIOCK 

NO 

TOTAL  HOURS 

Moulders 
Md 

Helper! 

Cor. 
Makers  & 
Helper* 

JOB  No. 

Description 

Hourg 

Pieces 
Mould- 
ed 

*%£ 

Made 

HOURS 

DESCRIPTION               HOURS 

DESCRIPTION 

1    Blast  Time. 

Gaggerg  Clampg, 
)  Flasks  and  Bars. 

Cupola  Repairs 
2     and  Attending. 

J  Cleaning  Castings 

3     Unloading  Material 

Repairs  and  Attend- 
ing Boiler,  Engines, 
[   Blower. 

Handling  Supplies 
4     General  Labor 

3  Watching. 

DROP  INTO  TIME  BOX  EVERY  DAY  AT  QUITTING  TIME. 

FIG.  105. — Foundry  workman's  time   card.     Manila   card,   31/2  inches 
wide,  6  inches  high. 

made  out  on  a  form  similar  to  Fig.  104,  a  copy  of  this  form  being 
sent  to  the  production  department.  On  receipt  of  scrap 
notices  a  new  order  is  entered  on  a  foundry  requisition  to  cover 
the  loss. 

237.  Clerical  Help  Required.— In  a  foundry  employing  thirty 
or  forty  moulders,  six  to  ten  core-makers,  eight  to  ten  men  in  the 
cleaning-room,  and  six  to  eight  men  in  the  yard,  a  foundry  clerk 


FOUNDRY  SYSTEMS 


231 


TOTAL 

TOTAL 

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232     FACTORY  ORGANIZATION  AND  ADMINISTRATION 


assisted  by  one  time-taker  can  keep  records  of  sufficient  accuracy 
for  all  ordinary  cost-finding  purposes,  provided,  of  course,  that 
the  time-taker  has  no  other  duties  than  those  connected  with  the 
time-taking. 


DAILY  CUPOLA  REPORT 

191 

Kind  and  Grade  of  Pig  Iron  Used. 

Pile  No. 

No.  of  Pounds. 

Total  Pig  Iro 

n, 

New  Scrap, 

M.irhine  Shop  Srrap, 

Total  IV 

[elt 

Coke  n<wH  in  Cupola,  only, 

Total 

Stone  Flux  used,  ..... 

Manganese  used,  

No.  Ibs.  of  Iron  melted  per  Ib.  Coke, 

RECORD  OF  FUEL  OTHER  THAN 

CUPOL/ 

V  USE. 

No.  Cubic  feet  of  C.as, 

c.  ft. 

Coal  used  for  Heating  Roiler,  et<-., 

Ibs. 

Coke  or   "serl  for  Heating  Ovens, 

Pile  No. 

ih* 

Water  Meter  Reading            .                  7  A-M- 

P.M 

FIG.  107. — Daily  cupola  report.     Manila  card,  5  1/2  inches  wide,  8  1/2 

inches  high. 

238.  Indirect  Foundry  Labor. — The  time  of  men  working  in 
the  cleaning-room  is  usually  charged  wholly  to  a  standing  order 
covering  "Cleaning  Castings."  The  yard  work,  such  as  unload- 
ing and  handling  pig  iron,  coke,  etc.,  may  sometimes  be  put 
with  considerable  advantage  on  a  piece  work  or  premium  basis. 


FOUNDRY  SYSTEMS 


233 


Time  of  moulders  spent  in  pouring  is  charged  to  a  standing 
order  under  the  head  of  "Blast  Time." 

239.  Foundry  Time  Ticket. — A  form  for  Foundry  Workman's 
Time  Ticket  is  shown  in  Fig.  105. 

240.  Daily  Cupola  Reports. — In  the  matter  of  cupola  reports, 
it  is  desirable  that  these  be  filled  out  by  a  careful  and  responsible 
person  who  remains  on  the  charging  platform  during  the  blast 
and,  while  there,  enters  the  weight  of  each  charge  as  it  is  made, 
recording  the  amount  of  iron  and  the  number  of  the  car  from 
which  it  was  taken.     This  serves  as  a  check  on  the  weight  of  the 
cars,  and  secures  greater  accuracy  as  to  the  kind  of  iron.     The 
entries  made  on  the  "Daily  Record  of  Work  Done"  and  the 


RECORD  OF  CASTINGS  MADE. 

To  M.S.  Per  deli 

'pry  Sheet, 

No.  Pound.       TOTAL. 

To  S    Dept.  Per  delivery  Sheet. 

Foundry  Stock  (C 

ore  Plates.Anchors.etc.),  

Defective  castings  returned  from  M.  Shorj, 

Defective  castines  returned  from  Foundry, 

Total  scrapped, 

N>t  good  castings  made 

REMARKS: 

FIG.  108. — Reverse  of  Fig.  79. 

charge  sheet,  a  form  for  which  is  shown  in  Fig.  106,  are  summarized 
into  a  daily  cupola  report;  shown  in  Fig.  107  and  a  "Record  of 
Castings  Made,"  shown  in  Fig.  108  which  are  simply  a  condensa- 
tion of  the  separate  items  entered  on  the  previous  forms. 

In  cases  where  there  is  a  possibility  of  the  weight  of  castings 
fluctuating  from  a  desired  standard  to  which  it  is  intended  that 
the  foundry  shall  adhere  strictly,  it  is  desirable  that  the  standard 
weight  be  entered  on  orders  and  job  tickets  so  that  these  weights 
are  noted  by  the  foundry  employees. 

241.  Weekly  Cupola  Reports. — A  summary  is  made  of  the 
daily  cupola  reports  once  a  week,  such  weekly  summary  being 
made  in  triplicate,  one  copy  remaining  on  file  in  the  foundry, 


234     FACTORY  ORGANIZATION  AND  ADMINISTRATION 


CUPOLA   RFPORT  WEEK   ENDING 

191  

Kind  and  Grade  of  Pig  Iron  Used. 

No.  of  Pounds. 

Per  Cent. 

No.          Pig  Iron 

No.          Pig  Iron 

No.          Pig  Iron 

New  Scrap 

Foundry  Scrap 

TVT    -1      r   -                                                                                                             NEW 

M.  Shop  Sciap                                                                          OLD 

Total. 

Remelt  Scrap 

Total  iron  to  Cupola* 

No.  pounds  Coke  used  in  Cupola- 

No.  pounds  Manganese  used  in  Cupola 

Castings  made  but  not  delivered 

Good  Castings  delivered 

Foundry  Scrap 

M.  Shop  Scrap 

Gager  and  Clamps 

Flasks  and  Bars 

Total  Castings  made 

Loss  in  Cupola    [Excluding  Remelt.] 

REMARKS: 
NOTE: 

Per  cent\  o 
Per  cent,  o 
Castings  d 

'.  iron  based  on  total  charge. 
Castings  based  on  Castings  made. 

FIG.  109. — Weekly  cupola  report.     White  bond  paper,  5  1/2  inches  wide, 

8  1/2  inches  high. 


FOUNDRY  SYSTEMS  235 

one  being  sent  to  the  shop  superintendent,  and  one  to  the  works 
manager.     Fig.  109  shows  a  form  for  such  weekly  cupola  report. 

REFERENCES 

KNOEPPEL:  "  Maximum  Production."  Chapters  IV  to  XIV. 
PERRIGO:  "Modern  Machine-shop  Construction,  Equipment  and  Manage- 
ment," Chapter  XXI. 


CHAPTER  XIX 
THE  MACHINE  SHOP  AND  TOOL  DEPARTMENT 

242.  Arrangement  of  Machines. — The  arrangement   of  the 
various  machines  in  the  machine  shop  will  depend  somewhat 
upon  the  general  tendency  of  the  sequence  of  operations.     Such 
a  general  tendency  cannot  be  established  from  a  few  parts  of  the 
product,  but  can  be  ascertained  only  by  a  careful  study  of  the 
processing  and  most  advantageous  routing  of  all  of  the  compo- 
nent items  involved  in  the  output. 

In  addition  to  leaving  room  enough  for  working  and  storing 
a  considerable  supply  of  work  in  process,  room  should  be  left 
for  the  installing  of  additional  machines  with  each  group  of  the 
same  kind  of  machines. 

243.  Foremen  and  Gang  Bosses. — Most  machine  shops  are 
insufficiently  officered.     The  foreman  of  the  machine  shop  is 
compelled  in  many  well-equipped  and  otherwise    well-organized 
shops  to  do  all  of  the  following  up  of  orders  in  his  department, 
to  act  as  an  expert  in  processing,  to  design  new  tools,  and  to  hire 
labor.     Under  such  conditions  anything  like  reasonably  high  effi- 
ciency is  unthinkable.     The  general  foreman  of  the  machine 
shop  should  be  assisted  by  an  assistant  foreman,  who  has  charge 
of  the  strictly  machine  work  processes,  another  assistant  foreman 
to  act  in  charge  of  the  strictly  bench  and  vise  work  and  group- 
assembling  part  of  the  machine  shop,  and  still  another  assistant 
foreman  in  charge  of  erecting  work.     In  addition  to  these  as- 
sistant foremen,  there  should  be  a  sub-foreman  or  gang  boss  for 
each  group  of  machine  tools,  and  for  each  specialty  in  assembling 
and  erection  work.     These  gang  bosses,   who  are  the  expert 
mechanics  in  each  group,  spend  most  of  their  time  in  direct 
productive  work  themselves,  and  about  one-fourth  or  one-fifth 
of  their  time  in  indirect  work  in  instructing  and  helping  others 
in  their  group. 

244.  Tool  Room  Independent  of  Machine  Shop. — The  tool- 
room should  be  either  a  department  independent  of  the  machine 
shop,  or,  if  under  the  supervision  of  the  general  foreman  of  the 
machine  shop,  there  should  be  a  separate  foreman  of  the  tool 

236 


MACHINE  SHOP  AND  TOOL  DEPARTMENT  237 

department.  The  foreman  of  the  tool  department  in  turn 
should  be  relieved  of  all  duties  pertaining  to  storage  of  tools  and 
blue-prints.  This  work  should  be  in  the  hands  of  a  competent 
assistant  in  the  tool  department  so  that  the  foreman  of  the  tool- 
room may  devote  practically  his  entire  energies  to  questions 
having  to  do  with  the  making  and  purchase  of  tools. 

245.  Relieving  Foremen  of  Clerical  Work. — If  the  general 
machine-shop  foreman  is  provided  with  a  competent  staff  of 
assistants,  as  above  outlined,  he  will  be  able  to  confer  intelli- 
gently with  the  head  of  the  production  department  and  tracers, 
and  may  be  expected  to  make  reasonably  accurate  statements 
as  to  time  of  completion  of  work  in  process.     He  can  never  have 
his  orders  well  in  mind  or  well  in  hand,  however,  if  he  is  over- 
worked, as  most  machine-shop  foremen  are,  with  a  multitude  of 
various  responsibilities  beyond  the  mental  capacity  of  one  man. 

The  issuing  of  shop  orders  and  following  them  up  are  duties 
which  in  the  best  shop  organization  are  delegated  to  the  produc- 
tion department,  a  department  entirely  independent  of  the  ma- 
chine shop.  Similarly,  workingmen's  time  records  belong  to  the 
time-keeping  department.  Records  of  employees  are  kept  in 
the  employment  department.  The  fact  that  these  last-named 
records  are  kept  in  a  separate  department  does  not  in  any  way 
lessen  the  authority  of  the  department  foremen  in  approving 
or  disapproving  of  the  men  in  their  charge  or  sent  them  for  final 
decision  as  to  employment. 

The  data  for  filling  in  efficiency  records  must,  of  course,  be 
obtained  from  the  department  foreman.  The  keeping  of  records 
is  work  of  a  nature,  however,  that  is  so  different  from  the  regular 
routine  of  a  department  foreman  that  the  necessary  records  will 
almost  certainly  fail  to  be  kept  up  unless  the  labor  of  recording 
is  centered  under  separate  supervision.  When  all  of  the  above 
duties  have  been  removed  from  the  machine  shop,  the  general 
foreman  will  have  opportunity  to  look  around  the  shop. 

While  it  is  sometimes  impracticable  to  have  the  desk  of  the 
general  foreman  so  located  that  he  can  have  a  clear  view  of  all 
of  the  shop  territory  under  his  control,  it  is  almost  always  pos- 
sible, and  certainly  desirable,  to  locate  sub-foremen  in  such  a 
way  that  they  can  at  all  times  have  a  full  view  of  all  of  the  men 
working  under  them. 

246.  Moving  Work  in   Process. — It  will   usually  be  found 
advisable  to  have  one  or  more  laborers  assigned  to  the  work  of 


238     FACTORY  ORGANIZATION  AND  ADMINISTRATION 

stock-moving.  It  is  the  stock-mover's  business  to  see  that  a 
piece  of  work,  finished  in  any  one  department,  is  quickly  taken 
to  .the  place  where  the  next  operation  is  to  be  performed,  and  to 
its  proper  destination  as  soon  as  the  last  operation  has  been  per- 
formed. It  is  the  stock-mover's  duty  to  assist  the  inspection 
department  in  seeing  that  all  articles  requiring  inspection  are 
promptly  brought  to  the  attention  of  the  proper  person  delegated 
to  do  such  inspection  after  each  set  of  operations  involving 
inspection. 

247.  Call  Bells. — It  has  been  found  useful  in  many  shops  where 
the  yard  gang  or  casting  cleanings  force  constituted  the  main 
supply  of  laborers,  to  have  an  annunciator  located  at  those  places 
in  charge  of  some  one  man,  this  annunciator  being  connected  to 
push  buttons  located  at  various  parts  of  the  shop  where  they  are 
pressed  when  a  laborer  is  wanted. 

A  similar  call-bell  system  is  used  in  many  shops  for  calling 
boys  from  the  tool-room  to  get  tools,  drawings,  requisitions, 
etc.,  the  men  pressing  their  push  buttons  some  little  time  before 
the  article  is  needed,  and  in  that  way  avoiding  any  loss  of  time. 
One  push  button  will  answer  for  a  considerable  floor  area.  When 
the  boy  arrives  at  the  area  corresponding  to  the  number  of  his 
call,  he  simply  calls  out,  "  tool-room  boy,"  so  as  to  attract  the 
attention  of  the  man  who  wanted  him.  A  better  plan  is  to  have 
the  tool  room  prepare  boxes  or  portable  stands  supplied  with 
tools  as  per  tool  lists  for  each  day's  jobs  in  accordance  with  the 
bulletin  board  showing  order  of  work  such  tools  being  furnished 
to  each  man  prior  to  his  beginning  his  next  job. 

It  must  be  borne  in  mind  that  the  mere  running  of  machine 
tools  at  their  best  feeds  and  speeds  is  not  in  itself  any  guarantee 
of  most  efficient  production,  since  delays  between  operations 
constitute  the  greatest  loss  of  time.  It  is  these  delays  which  are 
cut  out  by  the  use  of  well-managed  premium  or  gain-sharing 
wage  systems,  good  methods  of  routing,  scheduling,  and  stock 
moving,  and  orderly  arrangements. 

248.  Issuing  Blue-prints. — The  head  of  the  tool  storage  and 
blue-prints  issuing  room  should  be  constantly  following  all  blue- 
prints and  tools  so  that,  unless  they  are  in  current  use,  they  are 
promptly  returned  to  storage.     Blue-prints  drawn  by  foremen 
should  not  be  given  out  by  them  to  the  men.     There  should  be  an 
office  set  of  blue-prints  bound  together  in  sets,  each  set  represent- 
ing all  of  the  drawings  required  for"  a  certain  product.     These 


MACHINE  SHOP  AND  TOOL  DEPARTMENT  239 

sets  should  be  kept  for  reference  in  the  machine-shop  office  only, 
and  not  be  taken  away  from  that  office.  Blue-prints  for  use  by 
workingmen  should  be  kept  in  the  tool  storage  room  and  drawn 
on  checks  or  issued  with  tool  lists  the  same  as  shop  tools.  This 
practice  results  in  the  prints  which  are  in  the  shop  office  always 
representing  complete  sets.  The  systematic  arrangement  of  the 
record  sets  is  thus  not  interfered  with. 

It  is  desirable  to  enclose  separately  by  a  grating,  and  keep 
under  lock  and  key  such  part  of  the  tool-room  as  is  wholly 
devoted  to  storage  and  issuing  on  checks  of  tools  and  blue- 
prints. This  separate  grating  is  in  addition  to  the  general 
grating  or  partition  which  encloses  the  machinery  engaged  in 
tool-making  work. 

249.  Repairs  to  Machinery  and  Transmission  Apparatus.— 
In  most  small  or  medium-size  shops,  it  will  be  found  conven- 
ient to  have  the  repair  and  maintenance  work  of  the  machine 
shop  on  transmission  equipment  and  machinery  as  one  of  the 
duties  of  the  foreman  of  the  tool-room.  He  in  turn  may  have 
one  employee  in  his  department  whose  specialty  is  such  repairing 
and  maintenance  work,  and  he  may  have  to  call  a  considerable 
number  of  machinists  and  laborers  to  his  assistance  at  times. 
At  such  times  he  should,  of  course,  confer  with  the  foreman  of 
the  machine  tool  department  and  the  man  who  has  general  charge 
of  the  laborers.  In  a  small  establishment  a  single  standing 
order  will  suffice,  to  which  all  labor  and  material  for  repairs  and 
maintenance  of  shafting,  belting,  etc.,  may  be  charged.  In  larger 
factories  it  will  be  found  desirable  to  have  separate  standing 
orders  covering  the  repairs  and  maintenance  of  transmission 
apparatus  in  each  department,  so  that  this  expense  may  be 
properly  localized  in  determining  the  operating  expense  of  each 
department. 

Orders  covering  repairs  or  alterations  to  machinery  are  best 
taken  care  of  by  letting  each  order  bear  the  number  which  is  on 
the  number-plate  fastened  to  each  machine,  and  which  number 
appears  on  the  card  inventory  of  machinery.  The  orders  of 
this  series  should  emanate  from  the  tool-room,  where  a  brief 
description  of  the  nature  of  the  repair  or  alteration  is  stated  in 
the  wording  of  the  order,  so  that  this  brief  statement  may  be 
transcribed  on  to  the  inventory  card,  after  the  cost  department 
has  turned  in  a  record  of  the  cost  of  time  and  material.  The 
actual  doing  of  repair  work  on  machines  need  not  wait  for  the 


240     FACTORY  ORGANIZATION  AND  ADMINISTRATION 


TOOL  ORDER 


Date. 


No. "  T  " 

NAME   OF  TOOL  AND  NATURE  OF  WORK 


formal  typewriting  of  the  order  by  the  order  department,  since 
such  repair  work  on  machines  is  usually  an  urgent  matter.  The 
only  object  in  having  the  order  department  typewrite  the  order 
is  for  the  purpose  of  having  the  record  of  the  nature  of  the  repair. 
250.  Orders  for  Making  Tools. — In  the  chapter  on  the  Order 

/« • v      Department,   it   has   already 
^  \   been  stated  that  it  is  advisable 

to  have  a  separate  series  of 
orders  for  the  tool-room.  The 
foreman  of  the  tool-room 
should  be  provided  with  a 
form  on  which  he  may  write 
a  request  for  the  issuance  of 
an  order.  Prompt  attention 
must  be  given  to  these  re- 
quests by  the  head  of  the  plan- 
ning department,  who  should 
give  instructions  to  the  opera- 
tor of  the  billing  machine  on 
which  shop  orders  and  accom- 
panying shop  tags  are  written, 
that  such  tool-room  orders 
and  tags  be  promptly  type- 
written and  delivered  to  the 
messenger  without  delay.  In 
a  small  establishment,  the 
tool-room  foreman  may  him- 
self write  out  the  tags  which 
accompany  tool-room  jobs,  in- 
stead of  having  a  separate 
order  form.  Fig.  110  shows 
a  form  for  such  tool-rcom  or- 
der tag.  He  may  keep  a  book 


TOOL  ORDER- (STUB) 

O 

Date 


QUANTITY 


Date 
Completed 


LIST  OF  MATERIAL 

STOCK 


As  soon  ae  Tool  Is  oompleted.send  this  Stub  to  Shop-Office 


FIG.  110. — Form  for  tool  order  tag. 
Stub  kept  in  tool  department  till  order 
is  completed.  Salmon  tag  stock,  rein- 
forced eyelets,  41/8  inches  wide,  upper 
portion  5  inches  high,  lower  portion 
(stub)  6  inches  high. 


in  which  he  writes  a  descrip- 
tion of  the  consecutive  orders. 
He  should  have  the  general  foreman  or  superintendent  enter  his 
initials  opposite  each  of  the  items  in  this  book,  designating  that 
it  has  been  duly  authorized.  It  is  also  very  advisable  to  have  a 
column  in  this  book  in  which  is  entered  the  tool-room  foreman's 
estimate  of  cost  as  he  makes  it  at  the  time  of  asking  the  approval 
of  the  general  foreman  or  superintendent,  and  an  adjacent  column 


MACHINE  SHOP  AND  TOOL  DEPARTMENT  241 

in  which  is  posted  the  cost  department's  report  of  the  actual 
cost  of  the  tool  or  fixture  after  it  has  been  finished.  These 
columns  will  serve  as  a  very  good  basis  for  improving  the  efficiency 
of  the  head  of  the  tool-room  as  an  estimator  of  probable  costs  of 
tooling  equipment.  Where  the  tool-room  foreman  writes  out 
the  tag  which  accompanies  the  tool  or  fixture  in  process  of  manu- 
facture, it  is  advisable  that  he  keep  a  stub  of  this  tag  on  file, 
on  which  he  enters  material  issued  with  the  order  or  subsequently 
drawn  for  it.  If  it  is  drawn  from  his  own  stock,  shop  tags  accom- 
panying tool-room  work  will,  of  course,  be  of  a  separate  color 
from  tags  on  other  order  series,  and  when  a  tool-room  job  is  sent 
into  the  regular  machine  shop,  the  shop  tag  should  of  itself  be 
sufficient  authorization  for  the  doing  of  the  work.  The  tag 
accompanying  such  work  should  bear  the  signature  or  rubber 
stamp  authorization  of  the  general  machine-shop  foreman,  show- 
ing that  he  has  approved  the  order  for  work  outside  of  the 
tool-room  to  be  done  on  it. 

251.  Record  of  Small  Tools. — The  record  of  files,  small  tools, 
etc.,  that  are  drawn  from  a  tool-room  ought  to  be  localized  to 
individual  workmen  and  summarized  for  monthly  comparison. 
The  reason  should  be  written  on  each  requisition  on  the  tool 
storage  room  for  the  issuing  of  new  tools  or  tool  replacement. 
A  proper  system  of  standing  non-productive  orders  will  provide 
data  for  comparison  of  these  accounts  from  month  to  month  with 
a  view  to  encouraging  economy. 

252.  Repetition  Work  by  Tool -makers. — In  a  tool-room  of 
considerable  size  there  is  apt  to  be  a  good  deal  of  duplicate 
work,  such  as  the  making  of  hardened  bushings  for  the  holes  in 
drilling  jigs,  etc.,  which  can  be  put  on  a  premium,  bonus,  or 
gain-sharing   wage   basis.     The   same   is   true   of   similar  jobs 
occurring  often,  and  so  nearly  alike  that  they  are  practically 
the  same.     The  head  of  the  tool-room  should  compile  the  cost 
data  of  recurring  jobs  in  just  the  same  manner  that  the  works 
manager  is  considering  the  manufactured  product. 

253.  Tool   Steel  Tests. — The  head  of  the  tool  department 
should  compile  the  results  of  tests  of  tool  steel  with  a  view  to 
determining  what  kinds  of  tool  steel  are  best  for  the  various 
kinds  of  work  in  the  shop.     If  there  are  men  in  the  shop  em- 
ployed to  do  time-study  work  for  the  purpose  of  establishing 
premium,  bonus,  or  piece  rates,  such  men's  observations  may  be 
made  to  cooperate  in  securing  the  necessary  data  wanted  in 

16 


242     FACTORY  ORGANIZATION  AND  ADMINISTRATION 

connection  with  tool  steel  tests.  Fig.  Ill  is  a  form  used  for 
recording  the  data  of  an  individual  test  of  tool  steel.  Fig.  112 
is  a  form  used  for  summarizing  the  results  of  a  number  of  indi- 
vidual tests.  Some  authorities  argue  that  it  is  totally  incorret 
to  base  any  conclusions  on  the  amount  of  work  that  can  be 
done  with  one  tool  without  regrinding.  Mr.  F.  W.  Taylor 
bases  his  speeds  and  feeds  on  the  maximum  to  be  gotten  out  of 
a  tool  in  an  hour  and  a  half  without  regrinding.  If  replace- 
ment of  cutters  requires  a  long,  slow-grinding  process,  and  occa- 


TOOL  STEEL  TEST 

NAME  OF  STEEL  DEPARTMENT 

KIND  OF  TOOL  PART  FINISHED. 

KIND  OFMETAL.FINISHED DATE 


CONDITION  OF  METAL 

NO.  PIECES  FIN.  WITH  ONE  GRINDING  . 

NO.  P.IECE8  FIN.  WITH  ONE  TOOL 

CUTTING  SPEED  PER  MINUTE 

FEED   PER   REVOLUTION 

LENGTH  OF  PIECE  FINISHED 

SIZE  OF  TOOL 


PRICE  OF   TOOL. 
OPERATION 


TIME  TAKEN  FOR  OPERATION  . 


WORKMAN'S  NAME. 


FIG.  111. — Form  for  recording  tool  steel  test.     White  bond  paper,  81/2 
inches  wide,  51/2  inches  high. 

sional  reforging,  then  a  relatively  slower  speed  must  be  chosen 
than  where  facilities  are  at  hand  for  quick  replacement  and 
regrinding  of  cutters. 

254.  Scheduling  Machine-shop  Work. — The  Production  or 
Planning  Department  must  have  planned  long  before  a  man  is 
through  with  a  job  what  that  man  is  to  do  next,  so  that  there  is 
no  such  thing  as  a  workman  standing  around  and  waiting  for  a 
job  or  being  given  something  merely  to  keep  him  from  being  idle, 
and  then  being  compelled  to  change  his  job  as  soon  as  the  foreman 
finds  something  that  is  more  urgent.  The  practice  is  becoming 
more  and  more  general  of  having  a  sub-foreman  in  charge  of  only 
a  limited  number  of  men  or  machines,  and  giving  him  a  board  on 
which  there  is  a  hook  or  peg  to  represent  each  machine  or  work- 


MACHINE  SHOP  AND  TOOL  DEPARTMENT 


243 


ing  man  in  his  department.  On  this  peg  he  must  have  hanging, 
every  evening,  a  sufficient  number  of  duplicate  shop  order  tags 
to  provide  the  working  man  whom  the  peg  or  hook  represents, 
with  a  full  day's  work  on  the  following  day.  To  be  sure,  when 
the  next  day  comes  the  order  of  work  may  have  to  be  slightly 
modified,  but  where  this  system  is  put  into  practice  it  will  be 


No.  of  test 

No.  of  part  finished 

Workman's  number 

Department  number 

Operation 

Time  taken  for  operation 

Kind  of  metal  finished 

Condition  of  metal 

Size  of  piece  finished 

Name  of  tool  steel  used 

No.  of  pieces  fin.  with  one  grinding 

Speed  in  feet  per  minute 

Feed  in  inches  per  revolution 

Price  of  steel  per  Ibs. 

Cost  of  Steel  used  per  100  pieces 

Price  of  operation  per  100  pieces 

Wages  this  man  averages  per  day 

Years  production 

Saving  per  100  pieces 

Net  saving  per  1  yrs.  production 

^^__  —  .^       ^            —^  . 

^=====^====^^::^=^==^^ 

^===^=^=^:==:=^=z=^:^ 

FIG.  112. — Form  for  summarizing  tool  steel  tests.     White  bond  paper,  81/2 
inches  wide,  11  inches  high. 

found  that  there  will  be  less  need  of  dropping  a  job  and  changing 
to  another  than  without  such  systematic  planning. 

255.  Tool  Lists  for  Manufactured  Parts.— The  head  of  the 
tool-room  should  have  a  card  index  arranged  by  names,  and 
mark  numbers  of  product.  On  this  card  he  should  record  all 
tools  necessary  for  the  complete  tooling  of  the  part  in  question. 
A  form  for  such  record  is  shown  in  Fig.  113.  (See  also  Fig. 


244     FACTORY  ORGANIZATION  AND  ADMINISTRATION 


87.)  It  will  also  be  found  convenient  for  the  tool-room  fore- 
man to  have  a  cross  index  of  the  machinery  inventory,  ar- 
ranged by  kind  of  tool,  so  that  he  may  know  where  the 
machines  of  any  one  kind  are  located,  and  the  total  number  of 
each  kind  of  machine  in  the  entire  plant.  A  form  for  such 
record  is  shown  in  Fig.  114. 


T 

DOLING  RECORD  F^R  PART  No. 

OPERATIONS 

TOOLS  REQUIRED 

FIG.  113. — Record  of  tools,  jigs,  etc.,  required  to  machine  a  given  part. 
White  card,  6  inches  wide,  4  inches  high. 

256.  Identifying  Different  Brands  of  Tool  Steel.— The  dif- 
ferent brands  of  tool  steel  are  best  identified  when  the  steel  is 
still  in  the  bar  stock  by  running  narrow  strips  of  paint  length- 
wise along  the  bar  and  having  a  board  hung  up  in  the  tool-room 


KIND  OF  M 

RI7F 

ACHINE 

DEPT. 

INVENTORY  No. 

MAKE 

FIG.  114. — Record  showing  location  of  all  machines  of  any  one  kind  and  size. 
White  card,  6  inches  wide,  4  inches  high. 

on  which  is  listed  the  name  of  the  brand  of  steel,  corresponding 
to  each  colored  line  or  combination  of  colored  lines.  After  the 
bar  stock  has  been  formed  into  cutting  tools,  it  is  desirable  to 
have  the  brand  of  steel  and  the  shape  of  the  tool  stamped  on 
the  tool  itself,  using  certain  symbols  or  numbers  to  designate 


MACHINE  SHOP  AND  TOOL  DEPARTMENT^  245 

the  various  brands  and  shapes.  These  stamped  symbols^  num- 
bers or  letters,  must  be  placed  on  some  part  of  the  tool  where 
they  will  not  be  obliterated  by  grinding  on  re-forging. 

Detailed  instructions  as  to  the  heating  and  quenching  of  each 
brand  should  be  permanently  posted  in  that  part  of  the  shop 
where  this  work  is  done,  and  strict  adherence  to  these  instruc- 
tions should  be  enforced. 

257.  Check   System. — In  keeping  track  of    withdrawals   of 
tools  by  employees,  the  double  brass  check  system  as  suggested 
by  Mr.  Perrigo  will  be  found  better  than  the  single  check  system. 
In  the  double  check  system,  there  are  two  hooks  provided  for 
each  employee;  next  to  these  two  hooks  is  a  label  holder  in  which 
can  be  slipped  a  small  strip  of  paper  or  card  bearing  the  name  of 
the  employee,  corresponding  to  a  certain  tool-check  number. 
When  an  employee  first  reports  for  work,  he  is  given  a  supply  of, 
say,  10  round  brass  tool  checks,  and  10  square  checks  bearing 
the  same  number  are  hung  on  one  of  the  hooks  opposite  his  name. 
As  soon  as  he  calls  for  a  tool,  he  presents  one  of  his  round  checks. 
This  is  hung  on  the  vacant  hook.     At  the  same  time  one  of  the 
square  checks  is  taken  off  and  placed  in  the  tool  rack,  case,  or 
drawer  from  which  the  tool  is  taken.     When  he  returns  the  tool, 
he  is  given  back  his  round  check,  and  the  square  check  is  taken 
from  the  rack,  case,  or  drawer  into  which  it  had  been  placed  as 
a  substitute  for  the  tool.     This  system  enables  the  tool-room 
foreman  to  tell  by  the  number  of  round  checks  hanging  on  any 
man's  hook  just  how  many  tools  he  has  out.     In  the  single  check 
system,  only  a  single  check  is  used,  and  is  substituted  for  the 
tool.     In  this 'system  the  foreman  cannot  tell  how  many  tools  a 
man  has  out  without 'looking  practically  through  the  whole  tool- 
room or  keeping  an  additional  written  record. 

258.  Bolts,  Clamps,  Washers  and  Nuts  for  "  Setting  Up."— 
It  is  desirable  to  keep  the  floor  and  benches  in  the  machine  shop 
clear  of  bolts,  washers,  nuts,  and  clamps  used  in  setting  up  pieces 
in  the  machine  tools.     A  good  method  of  identifying  all  such 
bolts,  clamps,  etc.,  is  to  have  them  painted  a  bright  color,  such 
as  red,  blue,  or  green,  which  immediately  designates  them  as 
tool  equipments.     Many  shops  allow  these  bolts,  washers,  and 
clamps  to  be  thrown  indiscriminately  into  drawers  of  benches 
or  shelves.     A  much  better  plan  is  to  provide  specially  designed 
storage  places  for  them.     Fig.  115  shows  a  tool-room  section  so 
designed,  as  used  by  the  Tabor  Manufacturing  Company  of 


246^  ^FACTORY  ORGANIZATION  AND  ADMINISTRATION 


FIG.  115. — Tool-room  section  made  up  of  tiers  of  racks,  and  each  com- 
partment subdivided  with  boxes  labeled  with  brass  plates,  giving  the  size 
and  symbol  of  the  bolts  contained  therein.  Particular  attention  is  called  to 
the  method  of  stocking  the  bolts;  the  sizes  and  lengths  of  the  bolts  regulate 
the  sizes  of  the  boxes.  Pegs  are  provided  on  the  front  of  the  bottom  beveled 
edge  for  the  workman's  checks. 


MACHINE  SHOP  AND  TOOL  DEPARTMENT    ,     ,,.247 


FIG.  116. — Tool  Room  section  made  up  of  racks  of  Standard  Shelving 
with  Standard  attachment  to  care  for  the  widely  varying  stock  found  in 
Store  Rooms.  Note  the  check  hook  and  label  holder  provided  for  each 
compartment.  Particular  attention  is  called  to  the  sloping  shelving  used 
in  the  upper  portion  of  the  rack  which  takes  care  of  such  tools  as  drills, 
reamers  and  taps  of  which  only  a  small  working  quantity  are  carried  in 
stock.  Note  how  the  sloping  shelf  keeps  the  tool  at  the  front  part  of  the 
compartment  where  it  is  in  plain  sight  and  can  be  quickly  reached.  Each 
compartment  is  provided  with  a  check  hook  and  label  holder.  Arrangement 
of  the  shelving  with  the  less  used  material  at  the  top  of  the  rack,  small  and 
more  used  parts  at  a  height  where  they  can  be  quickly  reached  and  the 
heavier  parts  near  the  floor  where  they  can  be  handled  with  a  minimum 
amount  of  effort,  makes  it  very  efficient. 


248    '  FACTORY  ORGANIZATION  AND  ADMINISTRATION 


FIG.  117. — Tool  Room  Section  made  up  of  Standard  Shelving  with 
sliding  panels  for  snap  gauges,  lathe  dogs,  milling  cutters  and  similar  equip- 
ment. Panels  are  equipped  with  hooks  and  with  label  giving  the  number 
of  the  various  tools.  Check  hooks  are  provided  for  carrying  the  workman's 
check.  These  sliding  panels  give  a  much  more  compact  arrangement  for 
carrying  snap  gauges,  milling  cutters,  and  the  like,  than  the  usual  method 
of  hanging  these  on  boards  along  the  wall.  Another  feature  of  this  rack 
is  the  special  section  for  plug  gauges  as  shown  at  the  end  of  the  rack. 


MACHINE  SHOP  AND  TOOL  DEPARTMENT  249 

Philadelphia.     This  company  keeps  all  of  these  parts  in  the 
tool-room. 

259.  Storing  Tools. — The  problem  of  storing  a  large  number 
of  tools  into  a  small  space,  at  the  same  time  making  it  possible  to 
get  a  rapid  and  comprehensive  view  of  all  of  the  tools,  is  one 
which  can  be  met  by  the  designing  of  special  fixtures  for  holding 
the  tools.     This  problem  is  also  well  met  by  the  Lyon  Metal- 
lic Mfg.  Co.  in  the  construction  of  racks  of  standard  shelving 
with  check  hooks  and  label  holders  as  shown  in  Figs.  116  and 
117. 

In  general,  the  principle  of  concealing  as  little  as  possible 
from  sight  in  a'  tool-room  is  one  which  should  be  observed  in 
designing  fixtures  for  tool  storage,  hence  it  will  be  advisable  to 
avoid  closed  drawers  for  storage  purposes,  and  to  utilize  open 
shelves  as  much  as  possible.  Shallow  shelves  with  partition 
strips  separating  the  tool  compartments,  and  a  slope  toward  the 
front,  facilitate  the  removal  and  return  of  the  tools.  Space 
should  always  be  provided  for  the  workmen's  checks  as  sub- 
stituted for  tools  withdrawn. 

260.  Selection  of  Machines. — In  the  matter  of  machine  tool 
equipment  there  needs  to  be  constant  study  in  the  shop  as  to 
when  it  is  best  to  use  a  general  purpose  non-automatic  machine, 
when  to  use  a  semi-automatic  general  purpose  machine,  and  when 
to  use  single  purpose  non-automatic  or  single  purpose  automatic 
machines.     The  question  of  when  to  use  one  or  the  other  types 
of  machines  can  only  be  settled  after  a  careful  investigation  of 
cost  of  machines  of  various  types  that  will  answer,  and  the  cost 
of  tools  required  with  each  type,  as  well  as  the  time  in  which  each 
type  of  machine  will  do  the  work. 

As  regards  the  use  of  special  machines,  there  is  no  doubt 
but  what  their  adoption  enables  manufacturers  in  the  United 
States,  producing  articles  made  of  iron  and  steel,  not  only  to  com- 
pete with  foreign  makers  but  to  export.  The  high  price  of  labor 
in  America,  as  compared  with  wages  abroad,  forms  a  constant 
incentive  to  American  manufacturers  to  look  for  appliances  that 
will  reduce  their  cost  of  production.  The  result  is  that  fre- 
quently machines  that  are  first  introduced  as  special  finally  in 
some  cases  become  standard,  as  a  result  of  modifications  in  various 
ways. 

Within  recent  years,  machines  used. in  connection  with  press 


250     FACTORY  ORGANIZATION  AND  ADMINISTRATION 

working  of  metals  and  the  working  of  hot  metals  have  undergone 
a  development  fully  equal  to  that  which  has  taken  place  in 
machinery  of  the  strictly  machine-tool  class.  Presses  of  various 
types  are  now  found  in  all  improved  shops,  and  are  indispensable 
if  the  output  is  a  standard  article  and  produced  in  large  quanti- 
ties, such  as  sewing-machines,  typewriters,  agricultural  imple- 


PROPOSITION  FOR  NEW  MACHINERY. 


Proposition  No.  __  —  -    Date 
Name  of  machine  to  be 


To  be  used  in  _  _  _  Department 
In  the  manufacture  of  _  ,  _  _  - 


Part  and  operation  to  be  performed 


Present  method 


Present  piece  work  price  . 
Proposed  "  "  " — 
Expected  saving  per  year. 
Based  on  a  production  of_ 


Correct 


Cost  of  machine estimate  -  bid 

To  be  designed  by 

To  be  built  by 


Time  required  to  complete  -  deliver. 
Suggestion  by 


Estimated  reduction  of  cost,  on  above  basis  is  correct 


Cost  Department. 
Required  -  desirable1-  for  production 


Production  Department. 


Inspection  Department. 


FIG.  118. — Page  1  of  proposition  to  introduce  new  machinery.     White  bond 
paper.     Four-page  folder,  each  page  81/2  inches  wide,  11  inches  high. 

ments,  parts  of  automobiles,  etc.  A  few  years  ago  the  use  of 
presses  was  confined  to  the  manufacture  of  sheet  metal  goods, 
and  while  most  of  the  presses  now  in  use  are  still  cutting  or  form- 
ing articles  from  the  sheet  or  strip,  the  scope  is  broadening,  espe- 
cially in  the  direction  of  forming  bar  metals,  thereby  simplifying 
and  cheapening  operation  of  special  presses. 


MACHINE  SHOP  AND  TOOL  DEPARTMENT  251 

261.  Proposals  for  New  Machinery  Equipment. — Figs.  118  to 
120  inclusive  illustrate  a  form  used  in  a  large  manufacturing 
establishment  in  considering  proposals  for  introducing  new  ma- 
chine tools  or  special  machinery. 

Figs.  118  and  119  are  printed  on  the  inside  of  a  four-page  folder 
of  about  the  proportions  and  shape  of  a  foolscap  sheet,  and  are 


Page  2. 
PROPOSITION  FOR  NEW  MACHINERY. 

TOOL  DESIGNING  DEPARTMENT  Remarks: 


GENERAL  FOREMAN Remarks:. 


FOREMAN Remarks:. 


.ASSISTANT  FOREMAN Remarks:. 


WORKMAN Re,marks:_ 


NOTE:  Please  return  this  sheet  without  delay  to  the  Tool  Designing 
Department. 


FIG.  119. — Page  2  of  proposition  to  introduce  new  machinery  (see  Figs.  118 

and  120). 

a  record  of  the  anticipated  advantages  which  would  accrue  from 
introducing  the  new  machine.  It  will  be  noticed  that  opinions 
are  asked  for  from  a  number  of  individuals  and  departments, 
including  cost  department,  production  department,  inspection  de- 
partment, tool-designing  department,  general  foreman,  assistant 
foreman,  and  the  workman.  After  these  complete  expression? 


252     FACTORY  ORGANIZATION  AND  ADMINISTRATION 

of  opinions,  some  of  which  may,  of  course,  be  prejudiced  and  must 
be  taken  for  what  they  are  worth,  the  report  is  submitted  to  a 
committee  which  selects  from  the  various  proposals  those  which 
seem  to  be  most  advantageous. 

Fig.  120  is  printed  on  the  outside  front  page  of  the  folder. 


SUMMARY  AND  DISPOSITION  OF  PROPOSITION  FOR  NEW  MACHINERY. 


Proposition  No. 
Machine 


Proposition  approved 
Special  Order  Issued  - 

Special  Order  No 

Requisition  issued 

Drawings  approved  — 
Patterns  ordered 


Patterns  completed 

Castings  and  materials  ordered 
Machine  installed 


Experiments  completed 

New  Piece  Work  ticket  issued 

Former  earnings 

Present  earnings 


Inspection  Dept.  Report. 
Filed 


File  No._ 
Approved. 


FIG.  120. — Summary  and  results  of  proposition  to  introduce  new  machinery. 
(Outside  cover  to  Figs.  118  and  119.)     (See  Figs.  118  and  119.) 

REFERENCES 

Tuck  School  Conference  on  Scientific  Management,  pp.  155-175. 
EVANS:  "Cost  keeping  and  Scientific  Management,"  Chapter  XIII. 
PARKHURST:  "Applied  Methods  of  Scientific  Management,"  Chapter  VI. 
CARPENTER:  "Profit-making  Management,"  Chapters  V,  VI  and  VII. 
PERRIGO:  "Modern  Machine-shop  Construction,  Equipment  and  Man- 
agement," Chapter  XXIX. 


CHAPTER  XX 
SHIPPING  AND  RECEIVING  DEPARTMENTS 

262.  Relation  of  Shipping  and  Receiving  to  Other  Depart- 
ments.— In   most    establishments   shipping   and   receiving   are 
under  the  same  general  head.     In  others  purchasing  and  receiv- 
ing are  under  the  same  department,  while  in  still  others  the  re- 
ceiving  department   is   an  independent   department  reporting 
direct  to  the  factory  manager. 

263.  Copies  of  Orders  to  be  Sent  to  Shipping  Department. — 
The  shipping  department  should  receive  a  copy  of  every  order 
which  the  department  is  expected  to  ship,  such  copy  containing 
all  the  information  necessary  to  get  out  and  pack  all  items  belong- 
ing to  that  order.-    The  shipping  department's  files  of  unfilled 
orders  will  be  classified  according  to  the  order  classification  scheme 
of  the  company.     Thus  there  may  be  contract  orders  on  one 
file,  supply  orders  on  another,  etc.     Usually  the  shipping  depart- 
ment will  want  to  put  express  orders  on  a  separate  file  board 
from  freight  shipments.     All  reference  orders  or  changes  or  addi- 
tional information  should  be  written  on  blanks  bearing  the  same 
order  number  as  the  original  order. 

264.  Notice   of  Items  Ready  for   Shipment. — The  shipping 
department  should  be  furnished  a  weekly  list  of  large  orders 
or  contract  orders  which  it  is  expected  to  ship  the  following 
week  if  the  business  is  one  involving  the  shipment  of  large 
contracts,  so  that  proper  arrangements  can  be  made  for  ordering 
in  cars. 

265.  Stores   and  Inspection  Records  Prior  to   Shipment. — 
In  order  to  keep  complete  stock  records  it  is  necessary  that 
all  parts  should  pass  into  stock  and  be  recorded  as  having  been 
received  from  the  shop  before  they  are  shipped  out.     When  items 
on  any  order  sufficient  for  a  shipment  are  ready,  the  stock  depart- 
ment sends  its  order  copy  to  the  shipping  department,  with  a 
check  opposite  the  items  that  are  ready  for  shipment,  together 
with  date.     If  the  parts  are  not  inspected  parts  sent  in  quantity 
into  the  stock-room,  but  represent  large  machines  or  groups  of 

253 


254     FACTORY  ORGANIZATION  AND  ADMINISTRATION 

parts  which  do  not  actually  go  into  the  stock-room  but  are  shipped 
direct  from  the  shop  floor,  then  the  stock-room  copy  of  the  order 
should  be  stamped  by  the  floor  inspector.  The  shipping  depart- 
ment must  see  that  for  all  articles  shipped  direct  from  the  shop 
floor  there  is  an  inspection  record.  In  some  factories  the  inspec- 
tor's report  is  sent  to  the  shipping  department  as  a  notice  that 
goods  are  ready  for  shipment.  Orders  for  small  supplies  and 
repair  parts  coming  direct  from  stock  warehouse  are  not  usually 
marked  "Inspected,"  as  these  parts  are  usually  inspected  in 
quantity  by  an  inspection  department  which  examines  all  lots 
of  small  parts  just  before  they  are  turned  into  stock. 

266.  Packing  Rooms. — It  is  well  to  provide  a  room  or  space 
with  a  number  of  bins  of  various  sizes  closely  adjacent  to  the 
packing  and  loading  space.     The  stock  department  puts  into 
these  bins  the  items  which  they  have  ready  for  shipment  for 
various  orders,  hanging  a  tag  on  each  bin,  with  the  order  number 
marked  on  these  tags,  and  a  large  tag  marked    "Ready"  on 
such  bins  as  contain  goods  ready  for  shipment. 

When  the  shipping  department  receives  the'  stock-room's  copy 
of  an  order,  indicating  that  the  goods  are  ready  to  ship,  the  ship- 
ping department  order  copy  is  removed  from  the  regular  file  and 
put  into  a  temporary  file,  the  stock  department's  copy  is  stamped 
by  the  shipping  department  and  is  then  returned  to  the  stock- 
room. The  shipping  department's  stamp  does  not  necessarily 
mean  that  they  have  shipped  the  goods  that  day,  but  indicates 
that  they  have  noted  that  the  goods  are  ready  and  are  proceeding 
to  the  best  of  their  ability  to  get  them  shipped.  When  shipping 
department  is  ready  to  begin  packing,  a  shipping  department 
clerk  takes  the  shipping  department  order  temporary  file,  goes  to 
the  bins  in  the  storeroom  and  to  the  shop  floor  if  necessary, 
and  checks  off  by  items  all  material  called  for.  He  then  has  the 
packers  bring  the  material  to  the  loading-room  or  platform  and 
endorses  on  the  order  how  it  is  packed,  viz.,  the  number  of  boxes, 
barrels,  or  crates.  If  the  order  is  complete,  he  so  marks  it  and 
turns  it  over  to  the  clerk  who  writes  out  the  railroad  receipts  and 
packing  lists,  or,  in  a  smaller  establishment,  does  this  himself. 
Packing  lists  are  usually  written  out  in  manifold  as  are  also 
railroad  receipts,  there  being  usually  three  copies. 

267.  Packing  Cards  and  Lists. — In  each   package  there   is 
inserted  a  packing   card  similar  to   Fig.    121.     This   contains 
customer's  order  number,  shipper's  order  number,  date  packed 


SHIPPING  AND  RECEIVING  DEPARTMENTS 


255 


and  by  whom  packed,  and  give  full  information  as  to  what  to 
do  in  case  of  shortage  or  breakage  or  claims  covering  defects. 

Fig.  122  shows  a  form  for  packing  list,  one  of  which  is  placed 
in  the  package,  and  one  sent  by  mail  to  the  consignee;  another 
copy  goes  to  the  production  department,  which  vise's  same,  and 
then  sends  it  to  the  stores  department. 

Fig.  123  shows  a  form  for  freight  receipt  which  is  signed  at  the 


THESE  GOODS  WERE 


GHEGEED  BT  PACKER 

AND  THEREFORE  KNOWN  TO  CONTAIN 
ALL    THAT    THE     BILL     CALLS     FOR. 

Please  see  that  each  bale,  box  or 'package  is  delivered  to  you  in  good 
condition  by  transportation  company  before  receipting  for  goods.  If  short- 
age is  shown,  require  the  freight  agent  to  note  same  on  expense  bilL 

IF  YOU  ACCEPT  SHIPMENT  SHORT  OF  MATERIALS  SHOWN 
ON  PACKING  LIST  AND  BILL  OF  LADING,  YOU  SHOULD  NOT  EX- 
PECT  US  TO  ASSUME  THE  RISK 

Attention  to  above  will  work  to  our  mutual  protection. 

UNPACK    WITH     CARE 

Many  shortages  arise  from  goods  being  left  in  packages,  or  thrown  out 
"with  packing.  Your  own  experience  will  confirm  this.  RETURN  THIS 
CLAIM  CARD  with  letter  advising  particulars  in  case  of  disagreement  with 
invoice,  or  other  complaint,  as  packer  must  be  held  responsible. 

These  articles  have  been  checked  by  inspector,  and  shipped  in  perfect 
condition.  If  not  as  ordered,  return  this  packing  card. 

RETURNED   GOODS 

When  returning  goods  for  any  reason,  please  be  careful  to  mark  package 
plainly  with  your  name  and  address,  and  consign  goods  to 

Enclose  IN  PACKAGE  complete  list  of  articles,  and  state  why  returned, 
even  though  this  has  been  previously  explained  in  correspondence. 


Customers' Order  No. Date 

Our  Order  No.. Packed  by 


FIG.  121. — Packing  card.     Yellow  card,  7  inches  wide,  9  inches  high 

railroad  receiving  depot,  and  is  followed  by  the  railroad  com- 
pany's regular  bill  of  lading. 

268.  Shipping  Records. — As  soon  as  packing  lists  have  been 
written,  entries  are  made  into  a  shipping  record  book  of  form, 
similar  to  that  shown  in  Fig.  124.  This  book  contains  columns 
showing  date  of  shipment,  number  of  sheets  to  the  order,  how 
shipped,  car  number,  whether  freight  was  prepaid,  date  paid, 


256     FACTORY  ORGANIZATION  AND  ADMINISTRATION 


PACKING  LIST 


NO. 


DATE 


SHIPPED  To. 


ORDER  NO._ 
CAR  No. 


VIA. 


SHIPPING    DEPARTMENT 


RECEIPT  No. 


NO.       PKG. 


CONTENTS 


WEIGHT 


PACKED  BY 


PLEASE  CHECK  THIS  LIST  IMMEDIATELY 
ON  RECEIPT  OF  SHIPMENT  AND  NOTIFY  US 
_PROMPTLY  OF  ANY  ITEMS  NOT  RECEIVED. 


FIG.  122. — Packing  list.  One  copy  goes  to  consignee  by  mail,  one  copy 
is  placed  in  package,  and  another  copy  goes  to  production  and  stores  depart- 
ments. White  paper,  61/2  inches  wide,  81/2  inches  high. 


No.  
F 
Gonsignt 

FREIGHT    RECEIPT. 

SHOP  NO... 

B.  L.  NO_.  DATE- 

teceived  from 

>d  to 

By  the— 

7?.;?. 

in  apparent  good  order,  the  following  goods,  as  marked  and  described  below,  which  are  to  be 
delivered  in  like  order,  without  delay.     Subject  to  all  the  Conditions  of  Company's  Bill  Lading. 

No.  Pkgs. 

DESCRIPTION  OF  ARTICLES 

WEIGHT 

OWNER'S  RISK.         ORIGINAL. 

FIG.  123.— Freight  receipt.     Buff  paper,  6  1/2  inches  wide,  8  1/2  inches 

high. 


SHIPPING  AND  RECEIVING  DEPARTMENTS 


257 


name  of  consignee,  whether  a  test 
column  for  completed  shipments 
and  one  for  partial  shipments, 
and  a  column  showing  the  date 
on  which  the  packing  list  and 
order  copy  were  received  by  the 
billing  department,  and  by  whom 
they  were  received. 

The  packing  lists,  as  pre- 
viously mentioned,  are  made  out 
in  triplicate.  One  copy  is  at- 
tached to  the  shipping  depart- 
ment's order  copy,  and,  if  a 
freight  shipment,  is  retained  in 
the  shipping  office  until  railroad 
receipt  comes  back.  Packing 
lists  for  express  shipments  are 
sent  to  billing  department  the 
same  day  as  the  shipping  de- 
partment order  copies.  Those 
for  freight  shipments  are  not 
sent  to  billing  department  until 
railroad  receipt  is  returned  to 
shipping  department. 

If  part  of  a  company's  sales 
are  filled  by  direct  shipments 
from  some  other  party  to  the 
consignee,  the  following  routine 
will  serve  to  keep  the  shipping 
records  complete:  All  shipping 
memoranda  and  bills  of  lading 
covering  direct  shipments  to 
customers  from  outside  suppliers 
are  sent  by  the  general  office  to 
the  shipping  department  as  soon 
as  received.  A  packing  list  form 
is  then  filled  out  in  the  usual 
manner,  excepting  that  it  is  en- 
dorsed, "Direct  Shipment,"  to- 
gether with  date  of  shipment 
and  from  where  shipped.  The 


record  was  written  or  not,  a 


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258     FACTORY  ORGANIZATION  AND  ADMINISTRATION 


order  copies  are  then  handled  in  exactly  the  same   manner  as 
for  shipments  made  from  the  shop. 

269.  Shipping  Program  for  Carload  Shipments. — Mention  has 
already  been  made  of  the  fact  that  the  shipping  department 
should  receive  a  weekly  advance  shipping  program  covering 
carload  shipments,  such  programs  being  prepared  by  the  order 
department  as  a  result  of  consultation  with  the  production 


CAR  LOAD  SHIPMENTS 

TO 

MACHINES 

CAR 

DATE 

ROUTF. 

CAR 

INITIAL 

NO. 

FIG.  125.— Record  of   car-load  shipments.     White  bond  paper,  8  inches 
wide,  10  1/2  inches  high,  ruled  in  red  and  blue. 

department.  As  soon  as  the  shipping  department  has  ordered  a 
car  an  entry  is  made  in  a  book  entitled  "Carload  Shipments." 
This  book  may  conveniently  be  of  the  form  shown  in  Fig.  125. 
It  has  a  column  covering  "Shipped  to,"  "Machines,"  "Car  Ini- 
tials and  No.,"  "Date  Ordered,"  and  "Date  Left."  The  first 
date  in  the  date  column  indicates  the  date  the  car  was  ordered. 


CAR    RECORD 

CAR 

DELIVERED 
ON    OUR 
SWITCH 

SET 

LOADED 
OR 
UNLOADED 

TAKEN 
OUT 

SHIPPED  TO 
OR 
RECEIVED  FROV 

REMARKS 

INITIAL 

NO. 

.  ^_ 

FIG.  126. — Record  for  all  incoming  and  outgoing  cars.     White  bond  paper, 
8  inches  wide,  10  1/2  inches  high,  ruled  in  red  and  blue. 

This  item  is  important  as  it  usually  takes  some  days  to  get  a 
car  in.  As  soon  as  the  car  is  "set,"  entries  are  made  showing  the 
car  initials  and  number.  The  date  on  which  the  car  comes  in 
is  not  provided  in  the  form  shown,  but  may  be  a  desirable  record. 
A  second  entry  is  made  in  the  date  column,  indicating  the  date 
the  car  left.  A  column  is  also  provided  for  the  route,  and  one 
for  the  kind  of  car. 


SHIPPING  AND  RECEIVING  DEPARTMENTS 


259 


270.  Car  Records. — A  separate  record  is  kept  in  another  book 
entitled  "Car  Record,"  covering  all  cars  coming  in  and  going  out. 
This  record  is  useful  for  reference  in  matters  of  demurrage,  etc. 
A  form  for  this  record  is  shown  in  Fig.  126.  It  has  columns  for 
car  initials,  car  number,  date  'delivered  on  switch,  date  "set," 
date  loaded  or  unloaded,  date  taken  out,  party  shipped  to  or 
received  from,  and  a  column  for  remarks.  Cars  going  out  may  be 
distinguished  from  those  coming  in  by  entering  the  name  in  the 
column  headed  "Shipped  to  or  Received  From,"  in  red  for  out- 
going cars  and  in  black  for  incoming  ones.  In  some  cases  the 
same  car  that  has  come  in  is  used  for  an  outgoing  shipment. 
In  such  cases  two  entries — one  in  red  and  one  in  black — are  made 
in  the  column  headed  "Shipped  to  or  Received  From."  One  set 


FREIGHT   PAYMENTS.         "INCOMING." 

DATE 
OK 

NOTICE 

MONET 
BANDED 
TO 
DBIVEH 

DATE 
PAID 

WEIGHT 

EATE 

AMOUNT/ 

B.B. 

ORDERED 
TBOlf 
OB 
SHIPPED  BY 

BHOP'P.D 
OB 
MATB'L. 

PLACE 
SHIPPED 
FROU 

BEC'DIN 
OFFICE 

Date 

By 

Whom 

FIG.  127. — Record  of  freight  payments  on  incoming  goods.     White  bond 
paper,  8  inches  wide,  10  1/2  inches  high,  ruled  in  red  and  blue. 

of  entries  in  all  the  other  columns  will  serve  for  both  shipments. 
The  "Remarks"  column  is  used  for  entering  the  purchase  order 
numbers  on  any  carload  items  coming  in  on  a  purchase  order, 
and  for  other  memoranda. 

271.  Freight  Payments. — Freight  bills  are  entered  in  a  book 
called  "Freight  Payment  Book."  This  has  the  opposite  pages 
headed  respectively  "Incoming"  and  "Outgoing"  (see  Figs. 
127  and  128).  On  the  "Incoming"  page  there  is  a  column  for 
date  of  notice,  one  for  date  the  money  was  handed  to  driver 
(where  such  is  the  case),  one  for  date  paid,  one  for  weight,  one 
for  rates,  one  for  amount,  name  of  railroad,  ordered  from  or 
shipped  by,  shop  or  purchase  order  number  to  which  material 
applies,  also  column  covering  date  received  in  office  and  by  whom. 

On  the   "Outgoing"   page  there  are  columns  covering  way- 


260     FACTORY  ORGANIZATION  AND  ADMINISTRATION 

bill,  date,  date  money  handed  to  driver,  date  paid,  weight,  rate, 
amount,  shipped  via,  shipped  to,  order  number,  destination,  and 
a  column  headed  "Date  Received  in  Office  and  by  Whom."  This 
book  serves  to  keep  track  of  all  bills  in  drivers'  hands,  and  also 
serves  shipping  department  as  a  receipt  from  the  office  for  freight 
bills.  Items  covering  material  shipped  direct  by  other  companies 
are  entered  in  the  same  manner  as  shipments  from  the  factory, 
with  some  designating  mark  to  show  that  the  shipment  was  not 
from  the  factory,  but  was  a  direct  shipment  from  an  outside 
company.  As  soon  as  shipping  data  are  received  covering  such 
direct  shipments,  memoranda  of  such  information  as  shippers' 
order  number,  route,  and  amount  of  freight  paid,  are  entered  on 
the  shipping  department's  office  copy  of  packing  list. 


FREIGHT   PAYMENTS.        "OUTGOING" 

W/B 

DATE 

MONEY 
HANDED 
TO 
DRIVES 

DATE 
PAID 

WEIGHT 

EATE 

AMOUNT 

SHIPPED 
VIA 

SHIPPED 
TO 

SHOP 
NO. 

DESTINATION 

EEC'  DIN 
OFFICE 

Date 

By 

Whom 

' 

FIG.  128. — Record  of  freight  payments  on  outgoing  goods.     White  bond 
paper,  8  inches  wide,  10  1/2  inches  high,  ruled  in  red  and  blue. 

272.  Record   by   Serial   Numbers   of   Machines    Shipped.— 

The  shipping  department  usually  keeps  a  record  also  by  serial 
numbers  of  machines  of  various  types,  showing  to  whom  the 
machine  of  a  certain  serial  number  was  shipped,  when  shipped, 
reference  to  test  record,  etc.  Another  record  usually  kept  in  the 
shipping  department  is  a  record  of  shipping  weights  of  machines 
or  other  products  of  various  types. 

273.  Routing,   Classification  and    Rates. — The  head  of   the 
shipping  department  should  be  sufficiently  relieved  of  clerical 
routine  to  enable  him  to  devote  some  time  daily  to  the  matter 
of  classification  and  routing  of  shipments,  matters  which  most 
establishments  are  inclined  to  leave  to  the  railroads.     Proper 
files  for  taking  care  of  railroad  tariffs,  and  a  careful  study  of 
them  by  the  head  of  the  shipping  department,  are  likely  to  result 
in  saving  of  freight  charges  and  avoidance  of  delays  in  shipment. 

A  follow-up  system  should  be  used  in  connection  with  any 
freight  claims,  so  that  a  claim  is  never  neglected  for  any  consid- 


SHIPPING  AND  RECEIVING  DEPARTMENTS 


261 


erable  period  by  the  company,  even  though  the  railroad  may  be 
inclined  to  pigeon-hole  it. 

274.  Receiving  Department. — As  before  stated,  in  most  manu- 
facturing establishments  the  receiving  of  incoming  goods  is 
handled  by  a  man  or  a  group  of  men  who  come  under  the  super- 
vision of  the  shipping  department.  Some  factories  make  the 
receiving  department  a  part  of  the  purchasing  department. 
Some  others  make  an  independent  department  of  the  receiving 
department.  The  last-named  method  is  perhaps  preferable  to 
making  receiving  subordinate  to  purchasing.  Where  receiving 
and  purchasing  are  one  department,  there  is  a  tendency  to  be 
somewhat  lax  in  checking  up  incoming  goods  by  reason  of  the 
easy  access  on  the  part  of  the  receiving  clerks  to  purchase  records 
and  invoices. 

The  receiving  department  is  usually  provided  with  a  carbon 


MATERIALS  RECEIVED* 

PAGE  , 

DATE 

Consignor. 
Date  of  Shipment  and 
No.  of  Outward  Order 

d 

No.  of 
Parts 

Weight  in 
Pounds 

DESCRIPTION 

g 

For  Shop 
Order  No. 

FIG.  129. — Receiving  department's  report  of  form  in  which  receipts  from 
various  sources  are  listed  on  one  sheet.  White  bond  paper,  8  1/2  inches  wide 
11  inches  high. 

copy  of  all  purchase  orders.  For  convenience  in  checking  in 
items  such  as  castings,  etc.,  of  which  a  large  number  and  variety 
are  purchased  from  one  source  of  supply,  it  is  usually  desirable 
to  have  the  purchasing  department  write  separate  orders  cover- 
ing each  pattern  number  rather  than  to  specify  a  number  of  differ- 
ent patterns  on  the  same  order.  This  makes  it  easier  to  endorse 
partial  deliveries  on  the  receiving  department's  copies  of  the  pur- 
chase orders,  and  makes  it  simpler  to  remove  completed  orders 
from  the  receiving  department's  file  of  orders  representing  goods 
still  to  be  received. 

275.  Reports  of  Material  Received. — Fig.  129  shows  a  form 
of  receiving  department  report  covering  materials  received, 
which  is  the  form  such  report  usually  takes  when  the  items  re- 
ceived are  all  listed  on  a  single  report.  A  better  plan  is  to  write 
out  a  separate  receipt  slip  covering  each  consignment.  Fig.  130 


262     FACTORY  ORGANIZATION  AND  ADMINISTRATION 


shows  such  a  form  as  prepared  for  use  with  an  autographic  register 
machine.  The  form  shown  is  written  in  quadruple,  one  copy 
being  sent  to  the  purchasing  department,  one  copy  to  the  stores 
department,  one  to  the  production  department,  and  one  remaining 
on  file  in  the  receiving  room.  It  will  be  noted  that  in  this  form 
there  are  spaces  printed  for  the  date,  the  name  and  address  of  the 
shipper,  the  purchase  order  number,  the  production  order  num- 
ber, two  columns  for  checks,  the  first  being  headed  "  Partial 
Delivery,"  the  second  headed  "  Completed  Order/'  and  a  wide 
space  for  listing  the  items,  weights,  etc. 

276.  Reports  of  Castings  Received. — Fig.  131  shows  a  similar 
form  as  used  in  recording  castings  received.     This  form  provides 


TRIPLICATE. 

MATERIAL  RECEIVED.                ^O        291 

The  following  goods  have  been  received:             Dat* 

From 

PURCHASE 
ORDER  No. 

PRODUCTION 
ORDER  No. 

Partial 
Delivery 

Complet' 
Order 

•  — 

\3\ 

FIG.  130. — Receiving  departments  report  of  form  in  which  a  separate 
report  is  made  of  each  vender's  shipment  or  delivery.  White  bond  paper, 
8  inches  wide,  5  3/4  inches  high. 

space  for  date,  and  columns  headed  respectively,  "Number  of 
Pieces,"  "Pattern  Number,"  "Material,"  "Purchase  Order 
Number,"  "Foundry,"  "Production  Order  Number,"  two  col- 
umns for  checks,  the  first  being  headed  "To  Shop,"  the  second 
"To  Warehouse  " ;  and  two  columns  headed  "Warehouse  Report, " 
the  first  of  these  being  headed  "Bin  Number, "  the  second  headed 
"Balance  on  hand,  including  this  lot."  The  receiving  clerk  puts 
a  check  in  the  column  designating  whether  he  has  sent  castings 
to  the  shop  or  to  the  castings  warehouse.  The  receiving  depart- 
ment sends  one  copy  to  the  purchasing  department,  one  copy  to 
the  production  department,  retains  one  copy  for  itself,  and  sends 
one  copy  to  the  stores  record  clerk;  this  last  copy  going  first  to 


SHIPPING  AND  RECEIVING  DEPARTMENTS 


263 


the  castings  warehouse  where  the  warehouse-man  enters  the 
number  of  the  bin  into  which  he  has  put  the  castings,  and  the 
balance  on  hand,  including  this  lot  He  is  instructed  to  make 
an  actual  count  on  such  castings  as  he  receives  a  new  supply  of. 
In  this  manner  the  stores  records  are  checked  by  actual  count. 

277.  Express  Charges. — Fig.  132  shows  a  form  used  in  report- 
ing express  charges  to  the  accounting  department  by  the  receiv- 
ing department.  This  form  gives  the  name  of  the  shipper,  the 
nature  of  the  package,  the  date,  the  route,  charges,  purchase 
order  number,  and  by  whom  received. 

In  manufacturing  establishments  where  many  of  the  produc- 


[ 

j  ORIGINAL 

CASTINGS  RECEIVED.            NO            g2 

r>At* 

h 

No. 
fee. 

Pattern  No. 

Mat'l 

P.O. 
Order  No. 

Foundry 

For 
Production 
Order  No. 

Check  Which 

Warehouse  Report 

Shop 

To 
Ware- 
House 

Bin  No. 

Balance  on 

FIG.  131. — Receiving  department's  report  of  castings  record, 
paper,  8  inches  wide,  5  3/4  inches  high. 


White  bond 


tion  orders  cover  work  on  castings  which  come  to  the  receiving 
department  in  small  lots  at  a  time,  it  is  convenient  to  make  the 
receiving  department  the  storage  place  for  the  tag  production 
orders  which  are  awaiting  arrival  of  castings  before  work  can  be 
done  on  them.  The  receiving  department  will  arrange  these 
tags  in  filing  boxes  according  to  the  name  of  the  foundry  from 
whom  the  castings  are  to  come,  and  under  the  foundries  will 
arrange  the  tags  by  pattern  numbers.  As  soon  as  a  lot  of  castings 
arrives,  the-  first  thing  the  receiving  clerk  does  is  to  look 
over  the  tags  under  the  guide  card  bearing  the  name  of 
foundry  in  question  to  see  whether  he  has  shop  production 
tags  on  file  covering  any  of  the  castings  received.  In  case  he 
has  tags  on  file  and  sufficient  castings  as  called  for  by  the  tags, 


264     FACTORY  ORGANIZATION  AND  ADMINISTRATION 

he  will  send  the  castings  into  the  shop  instead  of  into  the  storage 
at  the  castings  warehouse.  In  case  there  are  not  enough  castings 
to  fill  the  order  the  normal  procedure  would  be  to  send  the  cast- 
ings to  the  warehouse,  noting  on  the  production  tag  in  the  space 
provided  for  that  purpose  how  many  castings  have  been  received, 
and  when  sent  to  the  warehouse.  In  case  there  is  a  rush  slip 
attached  to  the  production  tag,  the  production  department  is 
notified  at  once,  and  that  department  will  decide  whether  a  par- 
tial delivery  is  to  be  made  to  the  shop,  such  partial  delivery  being 
accompanied  by  a  detachment  tag,  the  writing  out  of  which  is 


EXPRESS   CHARGES 
NOTICE    FROM    RECEIVING    OEPT.   TO    AC( 


RECEIVED   FROM 


BBL. 


REEL 


DATE 


CHGS. 


»»•  O.  NO RCO.  BY. 

PROD.  ORD.  No 


FIG.  132. — Receiving  department's  notice  to  accounting  department   of 
express  charges.     White  bond  paper,  6  inches  wide,  4  inches  high. 

noted  on  the  regular  tag  on  the  place  provided  therefor.  De- 
tailed illustrations  will  be  found  in  the  chapter  on  "  Production 
or  Planning  Department." 

278.  Returned  Goods. — In  many  establishments  an  important 
phase  of  the  business  is  that  which  has  to  do  with  goods  returned 
for  repairs  or  for  exchange  or  for  credit.  The  following  system 
was  devised  to  take  care  of  such  cases: 

The  receiving  department  tags  all  returned  goods  with  iden- 
tifying tags  (which  show  name  of  shipper),  and  writes  out  a  re- 
turned goods  ticket,  shown  in  Fig.  133  in  triplicate,  entering  on 
this  ticket  the  following  information:  the  date,  the  party  return- 


SHIPPING  AND  RECEIVING  DEPARTMENTS 


265 


ing  the  goods,  what  the  goods  consist  of  and  quantity,  whether 
transportation  was  paid  by  shipper  or  by  consignee,  and  if  by  the 
latter,  the  amount  of  payment.  The  original  ticket  is  then  sent 
with  the  goods  to  the  inspection  department,  who  will  state  the 
condition  of  the  goods  on  the  ticket.  In  making  this  statement 
the  inspection  department  will  specify,  first,  whether  goods  are 
equal  to  new  stock  in  their  present  condition;  second,  whether 
by  doing  work  on  them  they  may  be  made  equal  to  new;  third, 
whether,  if  neither  of  the  above  conditions  exist,  they  have  any 
value  as  second-hand  goods;  fourth,  whether-  they  should  be 
scrapped.  The  inspection  department  then  sends  original  ticket 


RETURNED    GOODS. 

RECEIVED  FROM                                            ,  .   .    ,       •                       1*0 

iMPEcrori 
ncpoir 

CONDUCT  DEMI 
OISPOSITIOH 

«"»                                               -  ....      .  . 

FIG.  133. — Returned  goods  ticket.     White  bond  paper,  8  1/2  inches  wide, 

5  inches  high. 


to  the  general  office,  and  places  the  goods  into  a  space  provided 
for  that  purpose,  such  space  being  under  the  supervision  of  the 
stores  department.  A  duplicate  ticket  follows  the  same  course 
as  the  original,  except  that  it  is  sent  finally  to  the  head  of  the 
supply  department  instead  of  to  the  general  office.  The  trip- 
licate copy  remains  in  the  book  in  the  receiving  department,  and 
all  endorsements  as  to  disposition,  which  appear  on  the  original, 
are  copied  on  to  the  triplicate  in  the  receiving  department  as 
soon  as  the  original  is  returned  to  the  receiving  department. 
Disposition  of  these  goods  may  involve  either  the  rendering  of 
a  credit  memorandum,  the  issuing  of  a  shop  order,  or  the  con- 


266     FACTORY  ORGANIZATION  AND  ADMINISTRATION 

duction  of  further  correspondence  by  either  the  general  office 
or  the  supply  department.  As  soon  as  the  general  office  deter- 
mine on  disposition,  such  disposition  is  entered  on  the  original 
copy  which  is  sent  to  receiving  department,  who,  after  making 
triplicate  agree  with  original,  return  original  to  general  office  for 
file.  Whenever  the  disposition  of  the  returned  goods  involves 
work  on  the  part  of  the  shop,  regular  production  tags  are  to  be 
written  out  by  the  production  department.  On  presentation  of 
such  tags,  the  goods  will  be  delivered  by  the  stores  keeper. 
When  the  goods  have  been  put  into  condition  to  put  in  stock, 
the  inspector  makes  proper  indorsement  on  tags  accompanying 
the  goods;  this  tag  going  with  the  goods  into  the  stock-room, 
and  thence  to  the  stock  entry  clerks.  Such  parts  as  are  rejected 
by  the  inspector,  or  such  parts  as  are  marked  to  be  scrapped,  are 
put  through  the  regular  routine  of  rejected  parts. 


RECEIVE 
PATTERN 

PATTERNS  RECEIVED 

•>  FROM 

DATE 

As  FOLLOWS  VIA                              RECEIVED  BY 

PATTERN 
NO. 

MATERIAL 

NO.    OF 

DRAFTING  DEPT.  REPORT 

PURCHASING  DEPT. 
DISPOSITION 

FIG.  134. — Receiving  department's  report  of  patterns  received.     Blue  bond 
paper,  8  1/2  inches  wide,  4  1/2  inches  high,  ruled  in  red  and  blue. 


The  returned  goods  ticket,  it  will  be  noted,  has  a  space  at  the 
extreme  right  hand,  on  which  is  noted  the  word  "Disposition." 
This  column  is  filled  in  the  general  office,  and  the  ticket  is  then 
returned  to  the  receiving  department.  Such  goods  as  are  marked 
"Repair"  on  the  receiving  tag  are  held  in  the  storeroom  space 
provided  for  returned  goods  until  regular  shop-production  tags 
are  sent  there. 

For  such  goods  as  are  marked  "Put  in  Stock,"  the  stock- 
keeper  will  write  out  a  regular  production  tag,  having  the  in- 
spector endorse  it  on  the  back  just  as  though  it  were  a  part 
received  from  the  shop.  The  tag  will  then  be  sent  to  the  stock 
entry  clerks  for  record. 

279.  Patterns  Received. — Patterns  received  are  reported  to 
drafting  department,  purchasing  department,  and  production 
department,  on  carbon  copies  of  a  form  shown  in  Fig.  134,  the 


SHIPPING  AND  RECEIVING  DEPARTMENTS  267 

original  of  which  is  kept  on  file  with  entries  as  to  checking  by 
drafting  department,  and  disposition  as  designated  by  purchas- 
ing department.  See  also  Fig.  66,  and  accompanying  text  in 
Chapter  XIV. 

REFERENCES 

SCHULTZE:  "The  American  Office,"  Chapter  XXII. 

BRISCO:  "Economics  of  Business,"  Chapter  VIII. 

LASALLE   EXTENSION   UNIVERSITY:  "Course   in   Traffic    Management." 


CHAPTER  XXI 
TIME-TAKING 

280.  Time-clocks  and  Numbering  Men. — Practically  every 
factory  uses  a  time-clock  for  the  purpose  of  registering  the 
time  of  arrival  and  departure  of  employees.  There  is  a  con- 
siderable variety  of  time-clocks,  some  using  cards  and  some 
using  strips.  There,  are  clocks  on  the  market  which  have  auto- 
matic shifts  which  designate  lateness  or  irregular  time  by  prints 
of  different  color  or  similar  designation.  Where  cards  are  used 
in  a  clock,  it  is  very  desirable  to  use  an  addressing  machine 
for  printing  the  date,  check  number,  and  name  of  the  em- 
ployee on  the  cards.  Such  addressing  machines  may  be  used 
also  for  printing  the  same  information  in  the  upper  right- 
hand  corner  of  the  time-sheets  covering  observational  data 
taken  by  shop  time-takers  where  this  system  of  recording  men's 
labor  is  in  vogue.  The  same  addressing  machine  may  be  used, 
omitting  the  date  stamp,  to  make  up  a  pay-roll  list,  such  pay-roll 
list  being  arranged  by  departments.  This  necessitates  the  allot- 
ting of  a  certain  excess  quantity  of  men's  clock  numbers  to  each 
department,  in  order  to  allow  for  an  increased  number  of  em- 
ployees in  any  one  department.  It  is  desirable  to  have  consid- 
erably more  numbers  available  than  theje  are  employees.  This 
may  necessitate  the  use  of  one  or  more  additional  time-clocks  in 
order  to  provide  for  all  the  numbers.  There  are  many  advan- 
tages in  the  system,  however,  which  will  usually  compensate  for 
the  additional  cost  of  clocks.  One  advantage  which  will  be 
apparent  at  once  is  the  ease  with  which  the  total  pay-roll,  number 
of  employees,  and  average  wage  rate,  can  be  calculated  for  each 
department  where  the  check  numbers  for  one  department  are  all 
close  together;  for  instance,  numbers  from  one  to  fifty  may  be 
lathe  hands,  fifty  to  seventy-five,  boring-mill  hands,  etc. 

281.  Clock  Card  used  as  Job  Ticket. — The  clock  cards  are 
used  in  some  factories  for  recording  the  nature  of  the  work  done 
by  the  men.  A  system  for  this  purpose  is  as  follows:  Each 
workman  has  a  tin  box  in  which  he  keeps  his  time-tickets. 

268 


TIME-TAKING 


269 


The  same  ticket  is  used  for  time-stamp  by  the  time-clock,  and 
for  entries  describing  the  work  made  by  the  workman  him- 
self. One  side  of  the  ticket 
is  used  for  clock  stamps,  the 
other  side  is  used  for  postings 
by  the  man.  On  this  latter- 
named  side  there  are  rulings 
for  three  days  with  spaces  for 
a  number  of  entries  on  each 
day. 

A  yellow  time-ticket  is  used 
on  Monday,  Wednesday,  and 
Friday,  and  a  red  ticket  on 
Tuesday,  Thursday,  and  Sat- 
urday. On  alternate  days  the 
time-tickets  are  turned  in  to 
time-posting  clerks,  who  keep 
all  time-postings  up  to  date. 
In  such  a  system  it  is  difficult 
to  expect  workmen  to  observe 
their  time  more  carefully  than 
to  the  nearest  half-hour.  An 
office  boy  collects  the  men's 
time-tickets  the  first  thing  in 
the  morning  before  starting 
time.  At  the  time  of  collect- 
ing the  yellow  tickets,  say  on 
Tuesday  morning,  this  boy 
puts  into  each  workman's  box 
his  red  ticket,  these  red  tickets 
having  been  delivered  to  the 
same  office  boy  after  posting 
on  the  evening  of  the  day  on 
which  they  were  posted. 

Fig.  135  shows  the  front  of  a 
form  of  time-card  as  used  with 
this  system.  The  back  (not 
shown)  is  ruled  for  three  days' 
work  entries. 

In  most  shops  each  workman 
changes  jobs  a  number  of  times 


Week  endin 

No. 

Name 

pr 

DAY 

IN 

LOST     OR 

OVERTIME 

OUT 

OUT 

IN 

8 

A.M. 

P.M. 

M 

A.M. 

P.M. 

T 

A.M. 

P.M. 

W 

A.M. 

P.M. 

T 

A.M. 

P.M. 

F 

A.M. 

P.M. 

S 

A.M. 

P.M. 

Total  i 

Rntpj 

im.fi,              .                                                 hrs. 

Total  wages  for  week,  #_ 

FIG.  135.— Clock  time-card  with  work- 
man's record  of  orders  worked  on  listed 
on  back  of  card.  Two  sets  of  cards,  one 
yellow  and  one  red,  are  used,  the  same 
card  being  used  on  alternate  days  in  the 
shop  and  kept  in  the  office  for  posting 
on  the  other  alternate  days.  Brick  red 
card,  2  5/8  inches  wide,  7  inches  high. 


270     FACTORY  ORGANIZATION  AND  ADMINISTRATION 


a  day,  and  the  clock  card  will  hardly  allow  sufficient  room  for 
the  record  in  such  cases,  where  a  single  card  is  used  for  entries 
covering  an  entire  week,  or  even  a  half-week  with  the  system 
where  cards  are  changed  every  other  day.  The  manufacturers 
of  time-clocks  have  suggested  as  a  way  to  get  around  this  diffi- 
culty the  use  of  job  cards  in  addition  to  the  clock  card  for  attend- 
ance. In  this  system  the  production  or  planning  department 
or  the  foreman  or  department  clerk  or  time-keeper  writes 
out  individual  operation  or  job  cards  for  each  workman's  labor 
on  each  component  order,  the  starting  time  of  one  operation 
being  the  stopping  time  of  the  operation  next  preceding  it.  A 
form  of  clock  card  used  with  this  system  is  shown  in  Fig.  136. 


ORC 
DAT 
EMF 
ART 
STY 
NO. 
OPE 

ER    N 

ORDER  N 

DATF     . 

•> 

ORDER  N 

DATE 

1 

LOYE 

F    NO, 

EMPLOYE 
ARTICLED 

•    NO 

EMF 
ART 
8TV 

LOYE 
ICLE 

:    MO 

LE 

STVIF 

1  P 

OF  P 
RATI 

Mm 

NO.   OF  P 
OPERATIC 

FPES 

NO.  OF  P 
OPERATIC 

ECER 

1H 

N    

N 

M. 

M. 

M. 

T. 

T. 

W. 

W. 

Th. 

T 

XL. 

F. 

F. 

S. 

S. 

S. 

B. 

TOTAL  HOURS  M 
RATE 

N  

TOTAL  HOURS  M 

RATF 

M 

TOT 
RAT 
AMO 

AL  HOURS  M, 

AMOUNT 

AMOUNT 

INT 

o  c 

FIG.  136. — Individual  operation  clock  card  used  as  a  job  record.  In  this 
case  the  ticket  shown  in  Fig.  107  serves  only  as  a  pay-roll  basis.  Manila 
cards,  each  3  inches  wide,  5  inches  high. 

In  this  system,  as  in  all  systems  using  time-stamps,  it  is  necessary 
that  the  time-taker  or  the  foreman  be  on  the  spot  to  stamp  the 
clock  card  at  the  instant  of  changing  jobs,  in  order  that  the  time 
record  may  be  accurate;  otherwise  the  clock-stamping  will  have  to 
be  left  to  the  workman  himself,  which  is  impracticable  in  cases 
of  piece-work  where  a  check  on  the  workman's  record  is  necessary. 
282.  Time-stamps. — Recently  several  kinds  of  secondary 
time-stamps,  operated  from  a  central  Master  Clock,  have  been 
put  on  the  market,  which  provide  for  the  workman  stamping  a 
job  ticket  near  his  tool  or  pressing  a  button  making  a  record  at  a 
distance.  These  devices  have  been  suggested  as  means  for  doing 
away  with  the  delay  necessitated  by  the  man's  hunting  up  the 


TIME-TAKING 


271 


clock  operator  and  wait- 
ing to  get  his  job  ticket 
stamped — a  source  of 
delay  in  most  time- 
stamp  systems. 

As  a  general  thing  it  is 
expensive  and  unreliable 
to  have  workmen  post 
their  own  time  for  the 
purpose  of  making  a  rec- 
ord of  the  time  spent  on 
various  jobs  or  orders. 
A  mechanic  will  spend 
at  least  ten  minutes  a 
day  on  such  time-post- 
ing, which  will  amount 
to  one  hour's  time  for 
each  employee  in  a  shop 
every  week.  For  the 
same  cost,  a  number  of 
time-takers  can  be  em- 
ployed, one  time-taker 
for  every  forty  or  fifty 
men,  whose  business  it 
will  be  to  take  a  record 
of  all  time  on  shop  opera- 
tions. A  good  Produc- 
tion or  Planning  Depart- 
ment will  provide  job 
cards  already  written  out 
on  which  the  only  thing 
necessary  to  be  inserted 
is  the  workman's  num- 
ber and  the  clock  stamp. 

283.  Weekly  Time- 
Sheet.— Fig.  137  shows 
a  form  of  weekly  time- 
sheet  as  used  with  a 
system  where  the  time- 
taker  records  operations. 
This  sheet  is  ruled  up 
into  columns  headed  as 
follows:  "Shop  Order 
Nu  mber, "  "  Quantity, ' ' 


CHECK  NO. 
DEPARTMENT 

WEEKLY  TIME  SHEET 

REMARKS 

x           ^ 

;RS 
ARTMENT  ONLY 
5ENERAL  (NO  SPECIFIC  DEPT 

§ 

1 

l 

j 

o 

i 

£    g    £ 

1 

0           0. 

I 

»-' 

-J  UJ 

2§ 

.  .2  £  .5. 

* 

^ 
3 

§<  < 

z 

* 

6S 
|g 

P  o         > 

-  £      g£ 

! 

;r 

£  p        I 

§         U 

1 

=  ^r 

fj 

:°? 

5a« 

f. 

° 

z 

• 

a 

2 

£  ^ 

si 

• 

*• 

ij 

5    = 

• 

P 

Z 

. 

J5j 

0)     *              LJ     >     H 

t 
I 

o" 

1 

i 
s 

1 

g 

1- 
1 
1 

o 

03H                                 \ 
-Mid 
•ON 

s*    3!sl 
H§  -   1  * 

03 
( 

1 

||S             ^ 

< 
o 

1 

S 

1 

p 

OPERATION 

£ 

p 

TIME  CHECKED 

i 

1 

c   6 
1   z 

[ 

i 

i" 

NAME  OF  PART 

^=H 

Z 

OT  ON  MACHINE  TOOLS: 

i 

H 

$ 

3 

s 

J 

£ 

I 

ii 

s 

g 

£ 

P 

u    i 

j 

1 

272     FACTORY  ORGANIZATION  AND  ADMINISTRATION 

"Name  of  Part,"  " Mark  Number,"  "  Operation,"  " Machine  Tool 
Number,"  " Number  Started,"  "Number  Finished,"  "Time 
Started,"  "Time  Spent  on  Operation."  Then  follow  a  number 
of  columns  which  apply  when  a  premium  or  bonus  system  is 
in  vogue.  These  columns  are  headed  as  follows:.  "Total  Time 
Not  on  Standard"  (the  word  "Standard"  in  this  case  having 
the  same  meaning  as  premium  or  bonus  system),  "Total  Time 
on  Standard,"  " Standard  Time,"  "Success,"  "Gain,"  "Failure," 
"Loss,"  and  "Remarks." 

The  column  headed  "Time  Started"  is  used  to  enter  the  time 
by  the  clock  at  which  each  operation  is  begun,  the  finishing  time 
of  one  operation  being  the  beginning  time  of  the  next.  The  next 
column,  namely,  the  one  headed  "Time  Spent  on  Operation,"  is 
sub-divided  into  seven  sub-columns,  one  for  each  day  of  the  week, 
provision  being  made  for  Sunday  in  case  of  emergency  work.  In 
these  columns  is  entered  the  total  time  required  for  the  operation. 
If  an  operation  extends  over  more  than  one  day,  a  horizontal 
addition  along  the  line  on  which  that  operation  is  entered  will 
give  the  total  hours  and  minutes  spent  on  that  operation.  This 
total  is  entered  in  the  column  headed  "Total  Not  on  Standard," 
if  it  is  a  job  for  which  no  standard  time  has  been  established. 
If  it  is  a  job  on  which  there  is  an  established  time  standard,  the 
total  is  entered  into  the  next  column,  namely,  the  one  headed 
"Total  on  Standard."  The  following  column  gives  the  time 
allowance  for  the  specified  number  of  pieces.  If  the  time  in 
which  the  work  was  done  was  within  the  time  standard,  it  is 
entered  into  the  column  headed  "Success."  If  it  was  done  in 
less  time  than  the  time  standard,  the  amount  by  which  it  was 
less  than  the  time  standard  is  entered  in  the  column  headed 
"Gain."  If  the  operation  exceeded  the  time  standard,  it  is 
entered  in  the  column  headed  "Failure."  The* amount  by  which 
the  time  exceeded  the  time  standard  is  entered  in  the  column 
headed  "Loss." 

284.  Instructions  to  Time-takers. — The  following  copy  of 
instructions  to  time-takers  will  indicate  how  they  are  to  do  their 
work: 

1.  Do  not  take  more  of  workman's  time  than  is  actually 
necessary  to  get  the  necessary  information. 

2.  If  workman  is  engaged  in  handling  or  setting  up  heavy 
work  in  his  machine,  do  not  call  him  away  from  same.     See  him 
at  some  later  time. 


TIME-TAKING  273 

3.  The  following  questions  should  suffice  to  secure  all  informa- 
tion needed  for  time-taking: 

"  When  did  you  start  this  job?" 

"How  many  pieces  did  you  finish  on  the  previous  job?'7 

"Where  is  the  tag  for  your  present  job?" 

"Name  of  operation  on  job  engaged  on?" 

4.  Always  bear  in  mind  that  the  starting  time  on  one  job 
is  the  stopping  time  of  the  previous  job.     Make  no  allowance 
for  time  spent  in  setting  up  machine. 

5.  In  cases  where  workmen  have  no  tag  for  job  worked  on, 
notify  department  foreman,  and  in  case  he  does  not  provide  a 
tag,  notify  shop  tracer. 

6.  Instruct  workman  to  hang  tag  for  job  on  which  he  is  work- 
ing in  some  convenient  place  for  you  to  see  same.     In  passing 
about,  look  at  both  his  tag  and  his  work,  so  as  to  make  sure  he 
has  not  changed  jobs.     Familiarize  yourself  with  the  work  going 
on  through  the  department  to  which  you  are  assigned,  as  that 
is  a  great  aid  to  accurate  time-taking. 

7.  The   following   information   must   be    correctly   given   as 
called  for  on  the  time-sheet,  i.e.,  shop  order,  amount  of  pieces 
in  lot  called  for  by  tag,  name  and  number  of  part,  name  of 
operation  or  operations,  number  of  pieces  started,  number  of 
pieces  finished,  time  started,  time  finished.     Insist  upon  men 
reporting  correctly  the  number  of  pieces  finished  whenever  a 
break  in  a  lot  occurs. 

8.  You  can  be  of  some  aid  to  the  foreman  in  your  department 
by  informing  him  in  advance  that  a  man  is  likely  to  be  out  of  a 
job  at  a  certain  time.     It  will  be  well  to  notify  foreman  about 
thirty  minutes  previous  to  the  time  a  man  will  finish  the  job  he 
is  working  on.     This  will  give  him  a  chance  to  look  up  the  man's 
next  job. 

9.  All  time  for  jobs  on  which  there  is  no  regular  shop  order 
is  covered  by  a  list  of  standing  orders.     You  must  govern  yourself 
according  to  this  list  in  charging  such  time.     Be  sure  to  specify 
fully  the  nature  of  any  such  work;  when  there  is  any  doubt  as 
to  what  standing  order  number  to  charge  this  work  to,  consult 
head  of  cost  department. 

The  weekly  time-sheet  as  described  possesses  the  advantage 
of  easy  checking  against  time  totals  independently  taken  from 
the  clock  cards.  It  also  facilitates  the  posting  by  weeks  on  to 
cost  sheets,  and  makes  it  possible  to  add  up  the  entries  for  a  giver* 


274     FACTORY  ORGANIZATION  AND  ADMINISTRATION 


week  against  all  of  the  shop  orders,  and  making  a  sum  total  of 
these  entries  to  check  them  against  the  week's  pay-roll.  In  the 
lower  left-hand  corner  of  the  time-sheet,  as  shown,  is  a  summary 
of  time  on  machine  tools  with  the  total  hours  done  on  each 
separate  machine  tool  separately  reported.  This  summary 
makes  it  easy  to  total  up  the  total  working  hours  of  each 
machine  tool,  information  which  is  needed  where  it  is  desired 
to  establish  an  hourly  machine  rate  for  each  machine.  In  the 
center  of  the  sheet,  at  the  bottom,  is  a  summary  covering  attend- 
ances and  overtime  work,  in  which  summary  are  listed  for  each 


ORIGINAL. 


S.O.. 


A  nit. 


Namt 
Oper. 


FIG.  138. — Individual  operation  slip  filled  by  time-taker.  t  White  paper, 
6  inches  wide,  31/2  inches  high,  perforated  at  lower  edge,  where  it  is  attached 
to  duplicate  filled  at  same  writing  by  inserting  piece  of  carbon  paper  and 
folding  back. 

day:  "Time  Late  or  Off  Duty/'  "Absent,"  "Overtime,"  "Addi- 
tional time  paid  for  on  account  of  overtime, v  a  check  mark  show- 
ing that  the  time  was  checked  with  the  clock  record,  and  the 
total  time  to  be  paid  for  for  each  day.  In  the  extreme  right- 
hand  lower  corner  is  a  distribution  showing  the  relative  time  spent 
on  productive  orders  and  on  non-productive  orders,  the  non- 
productive time  being  again  subdivided  so  as  to  show  whether 
non-productive  time  was  put  in  in  the  department  in  which  the 
man  was  listed,  how  much  non-productive  time  was  on  account 
of  other  departments,  such  departments  being  specified,  and  how 
much  non-productive  time  was  for  account  of  the  shop  in  gen- 


TIME-TAKING 


275 


eral.  This  summary  is  for  the  purpose  of  facilitating  the  estab- 
lishment of  a  local  hourly  expense  rate  of  operating,  being  inde- 
pendent of  a  further  rate  based  on  fixed  charges;  these  fixed 
charges  including  such  items  as  interest,  insurance,  etc. 

285.  Individual  Operation  Time-slips. — Another  method  of 
time  report  in  which  a  separate  time  slip  or  card  is  written  out 
every  time  a  man  changes  operations  is  shown  in  Fig.  138.  The 
example  shown  is  written  in  duplicate  by  the  time-taker,  who 
hands  one  copy  to  the  workman;  the  latter  being  in  this  way 
provided  with  a  means  for  checking  his  gains  under  the  premium 
system.  In  the  example  shown  the  time-takers  write  in  the  time. 


TIME  EMPLOYED                                           COMMENCED 

Date 

Job  No. 

MACHINE   SHOP 

Workman  No. 

Boring 

Drilling 

Grinding 

Planing 

Time  Allowed 
Tapping 

Chipping 

Facing 

Milling 

Roughing 

Premium  Credit 
Threading 

Cutting  Off 

Filing 

Mounting 

Shaping 

Foreman 
Turning 

Quantity                             Total  Timp                    Rate                    f^ost 

FIG.  139. — Calculagraph  individual  operation  ticket.     White  card,  5  inches 
wide,  3  inches  high. 

These  slips  are  sometimes  bound  in  booklets  of  fifty  or  more, 
the  booklet  being  intended  to  last  a  week.  The  front  cover  of 
the  booklet  serves  as  a  time-card  for  registering  starting  and 
stopping  time.  The  individual  pages  represent  job  tickets,  and 
are  torn  out  daily  as  filled  and  filed  by  job  or  order  numbers. 
The  back  cover  serves  as  a  distribution  of  labor  into  productive, 
non-productive  work  on  machines,  work  not  on  machines,  etc. 
286.  Time -slips  for  Clock  Stamping. — Fig.  139  shows  a  some- 
what similar  form  in  which  the  time-taker  uses  a  calculagraph 
for  stamping  the  time  begun  and  time  consumed.  When  the 
man  is  assigned  a  job,  the  time-card  is  written  out  and  the  first 
calculagraph  impression  is  stamped  on  the  card.  As  soon  as  the 


276     FACTORY  ORGANIZATION  AND  ADMINISTRATION 


TICKET  NO. 

PART  NO.                        PAT.    NO. 

8                                                                   t 

NAME  OF  PART 

1                                                                   g 

OPERATION  NO. 

NAME  OF  OPERATION 

MADE  ON  MACHINE  NO. 

NO.  PIECES  STARTED 

No.  PIECES  COMPLETED 

KIND  OF  MATERIAL 

MISHAP  REMARKS 

MATERIAL  WAS  BOUGHT  OF 

REGULAR  TIME 

OVER  TIME 

ORDER  NO. 

FIG.  140, — Time-card  for  use  with  time-stamp.     Yellow  card,  6  inches  wide, 

4  inches  high. 


COST  DEPT. 

Order  Nn.                                               MAPHINF  HFPT    A//0     1                       Drawing  Nn. 

PAnr.k  Nn.                       Rate                      Amount                         Name 

111  2s  3s  4s  51  6s  7s  8s  9s  10s  11s  12s 

13il4!l5*16il73M8i19i20!21i22i23*24i 

Armature 
"   Coil  Support 

Nut 
Oil  Guard 

START. 

UNUSUAL  OPERATIONS. 

OPERATION 

"  End  HeadF.,R. 
Belt  Tighteners 

Pawl 
Pedestal  F.,R. 

Assembling 

Bolt,  Stud 

Pins 

Babbitting 

Brush  Wobbler 

Rail 

Bell-Boy 

••     -foke 

Res'tance  Cages 

Boring 

Bushing 

Pipes 

Centering 

CaporCov'rP.,R. 
Collars 

Ring 
Rocker  Arm 

. 

Chipping 
Clerk 

Coupling 

Roller 

Cutting 

Clevis 

••  Bushing 

Drilling 

"     Block 

"    "(Eccentric) 

Facing 

"     Screw 
Coil  Former 
Collector  Ring 

Screw  Adjusting 
"   Cap-Fil.Hei. 
"      Jacks 

FINISH. 

Filing  &  Fitting 
Finishing 
Helping 

Commutator 

Shafts 

Nut 

Spacing  Pieces 

Laborer 

Ring 

Spider 

Laying  out 

Sleeve 

«      Wing 

Milling 

Cont  oiler  Drum 

Starwheel 

Planing 

frame 

Sub-  Base 

t 

Repairing 

Handle 

Swivel 

Shaping 

Handwheel 

Yoke,  Upper 

Slotting 

Housing  F..R. 

••      Lower 

Tapping 

••      Beadplate 

Threading/ 

Turning,!/ 

FIG.  141. — Time  slip  having  principal  parts  and  principal  operations  in 
any  department  printed.  (For  use  with  clock  stamp.)  Blue  paper,  6 
inches  wide,  4  inches  high. 


TIME-TAKING 


277 


man  has  completed  the  job  the  time-taker  stamps  the  second 
impression  on  the  card,  the  second  impression  showing  the  time 
consumed.  In  order  to  use  a  calculagraph  or  clock  stamp,  it  is 
necessary  that  the  time-taker  be  on  the  spot  all  the  time.  This 
system  always  requires  some  of  the  workman's  time  to  be  spent 
in  taking  his  card  to  the  time-clock.  Fig.  140  shows  a  similar 
form  for  use  with  a  time-stamp. 

287.  Time-slip    with    Ordinary    Operations    Printed    On. — 
Fig.  141  shows  a  time-slip  in  which  the  ordinary  operations  are 
printed  in  the  extreme  right- 
hand  margin,  with  the  name 

of  the  commoner  parts  on 
which  work  is  done,  in  the  ex- 
treme left-hand  columns,  a 
blank  column  being  provided 
for  entering  in  writing  unusual 
operations,  and  further  blanks 
being  provided  for  clock  stamps 
showing  time  of  starting  and 
time  of  finishing. 

A  still  further  form  for  use 
with  the  clock  stamp  or  calcu- 
lagraph is  shown  in  Fig.  142. 

288.  Tabulating    Machine 
Systems. — Within  the  last  few 
years  the  tabulating  machine 
has  come  into  use  to  some  ex- 
tent in  connection  with  keep- 
ing account  of  workmen's  time. 
In  order  to  use  a  working  card 

in  the  tabulating  machine  it  is  necessary  to  designate  every- 
thing numerically,  the  record  being  formed  by  punching  the 
digits  in  columns  of  figures  printed  on  the  card,  such  punch- 
ing being  done  by  a  special  machine.  The  punching  may  be 
done  as  a  transference  of  records  taken  originally  in  pencil. 
The  parts  are  designated  by  numbers,  operations  are  desig- 
nated by  numbers;  departments,  machines,  order  number, 
the  time,  and  the  amount  in  dollars  and  cents  to  which  the  time 
is  equivalent  are  all  punched  in  the  ticket.  The  tickets  for  a 
given  day  are  put  into  a  sorting  machine  which  will  classify  them 
according  to  the  same  numbers  in  any  column;  for  instance,  all 


Operation                                            OrHpr  Nln. 

Hours  y  Ra+g       =    4-_  Quantity^        Cnst   Each 

BEGAN                                          ENDED 

-       V 

FINISHED   CONTINUED    (SCRATCH  OUT  ONE  WORD)  CA 

RIED 

FIG.  142. — Another 
form.  White  card,  4 
51/2  inches  high. 


calculagraph 
inches    wide, 


278     FACTORY  ORGANIZATION  AND  ADMINISTRATION 

tickets  may  be  assorted  by  departments,  by  operations,  by  men, 
by  order  numbers,  etc.,  depending  upon  which  column  is  being 
used  for  the  purpose  of  assorting.  After  the  assorting  process 


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has  been  finished,  which  is  done  at  a  very  rapid  rate  by  the 
machine,  the  cards  are  put  into  the  accumulating  or  adding 
machine,  which  adds  up  the  hours  and  minutes  and  dollars  and 
cents  total  for  any  package  of  tickets. 


TIME-TAKING 


279 


Fig.  143  shows  a  card  as  used  with 
a  tabulating  machine  system  as  above 
described.  The  tabulating  machine 
method  makes  it  possible  to  post  time 
and  wages  much  more  rapidly  than 
any  other  method. 

289.  Pay-roll  Distribution  and  Lo- 
calization of  Departmental  Expenses. 
— In  order  to  localize  operating  ex- 
penses by  departments  and  to  indi- 
vidual workmen,  it  is  necessary  to 
have  some  form  of  pay-roll  distribu- 
tion. A  form  for  recording  such  dis- 
tribution is  shown  in  Fig.  144.  A 
sheet  of  this  sort  is  written  out  for 
each  shop  department.  Opposite 
each  employee,  designated  by  his 
check  number,  is  given  his  rate  of 
pay,  his  time  on  each  class  of  produc- 
tive orders  or  direct  labor.  Then  fol- 
lows a  summation  of  his  total  produc- 
tive hours  and  the  money  value  of  his 
productive  time.  After  this  follow 
thirteen  columns  for  non-productive 
standing  orders.  Although  a  factory 
may  have  about  a  hundred  different 
standing  orders  to  which  non-pro- 
ductive work,  operating  expense,  in- 
direct labor,  etc.,  may  be  charged,  it 
is  likely  that  thirteen  columns  will 
suffice  for  the  different  orders  in 
any  one  department  to  which  time 
will  be  charged  in  any  one  pay-roll 
period.  After  the  detailed  distribu- 
tion of  non-productive  time  follows 
a  summation  of  the  entire  non- 
productive time  of  each  employee 
and  its  cost  in  dollars  and  cents. 
The  last  column  represents  the 
total  pay  envelope  of  each  em- 
ployee. 


PH 

o 

S  , 

O      s 

a 


280     FACTORY  ORGANIZATION  AND  ADMINISTRATION 

This  sheet,  made  out  for  each  department,  serves  as  the  basis 
for  departmental  summaries,  showing  local  departmental  ex- 
penses, affording  at  the  same  time  complete  data  for  analysis  of 
the  causes  of  these  expenses. 


CHAPTER  XXII 
COST  DEPARTMENT 

290.  Competition  and  Costs. — The  natural  basis  of  selling 
prices  is  the  shop  cost.  Competitors'  prices  must  be  considered, 
it  is  true ;  but  no  matter  what  these  prices  are,  the  shop  cost  must 
always  be  a  positively  known  quantity. 

The  competitive  system,  by  the  necessity  of  meeting  the  prices 
set  by  rivals,  has  brought  about  pronounced  economic  advan- 
tages, when  reductions  in  selling  prices  have  followed  similar 
reductions  in  cost  through  the  introduction  of  labor-saving  ma- 
chinery or  greater  simplicity  in  design.  On  the  other  hand, 
many  failures  have  resulted  from  blindly  meeting  prices  set  by 
others  before  actually  reducing  the  shop  costs  of  machines.  This 
has  been  notably  the  case  in  the  manufacture  of  electrical  machin- 
ery. Some  years  ago  the  establishments  manufacturing  machines 
of  large  capacity  for  street  railway  power  and  municipal  lighting 
plants  demanded  high  prices  for  machines  of  low  capacity.  This 
opened  the  way  for  numerous  small  factories,  which  for  some 
years  were  able  to  sell  the  small  machines  at  prices  considerably 
lower  than  the  large  corporations,  and  were  able  to  prosper  not- 
withstanding the  admitted  fact  that  the  large  corporations  could 
not  meet  their  prices  on  small  machines  without  loss.  In  some 
cases,  it  is  true,  inferior  machines  were  put  on  the  market,  by 
the  smaller  establishments,  but  in  many  cases  the  lower-priced 
machines  were  efficient  and  well  designed.  The  result  was  that 
the  large  corporations  beset  themselves  to  redesign  their  smaller 
machines,  spending  large  sums  in  experiments  for  the  purpose 
of  obtaining  cheaper  insulating  materials,  for  reducing  the  weight 
of  the  more  expensive  metals  employed,  and  for  winding  and 
insulating  coils  by  machine.  The  result  was  that  some  years 
later  the  large  corporations  were  able  to  put  on  the  market  ma- 
chines of  lighter  weight  and  more  compactness  than  they  had 
originally  built,  and,  with  improved  methods  of  manufacture, 
were  able  to  undersell  the  smaller  manufacturers.  Several  of 
the  small  factories  endeavered  to  meet  the  reduced  prices,  fur- 
nishing their  heavy  machines  with  expensive  insulation  and  hand- 

281 


282     FACTORY  ORGANIZATION  AND  ADMINISTRATION 

windings,  and  were  unable  to  stand  the  pressure.  On  the  other 
hand,  other  small  shops  gradually  worked  up  new  designs  and 
new  methods  until  they  were  again  in  the  field  with  machines 
practically  identical  with  those  of  the  large  corporations,  which 
they  could  afford  to  sell  without  loss,  at  competitive  prices. 

291.  Importance  of  Cost  Department. — It  is  apparent  that 
during  such  transitional  periods  a  well-conducted  cost-keeping 
system  is  indispensable.  No  progressive  shop  can  allow  the 
figuring  of  costs  to  drag  for  months  behind  actual  operations. 
It  is  necessary  to  know  costs  accurately  and  immediately.  If 
the  work  of  cost-keeping  is  turned  over  to  an  underpaid  and  over- 
worked clerk,  who  has  to  expend  all  of  his  vitality  and  energy  in 
calculations  of  multiplication  and  addition,  and  has  no  time  left 
for.  comprehensive  comparisons,  accurate  and  valuable  cost 
statistics  cannot  be  obtained.  The  cost  department  work  is  of 
such  importance  in  a  factory  that  it  should  receive  the  attention 
of  the  very  best  intellect  obtainable.  This  fact  has  been  recog- 
nized by  one  of  the  largest  American  electrical  corporations  the 
present  general  manager  of  which  is  a  man  who  some  years  ago 
had  charge  of  the  cost  department.  And  here  it  will  be  well  to 
consider  the  advantage  of  departmental  organization  of  clerical 
and  accounting  work,  as  well  as  of  the  factory  proper.  The 
head  of  the  cost  department  and  the  purchasing  agent  will  be 
hampered  in  many  ways  if  they  are  made  subordinate  to  a  book- 
keeper or  superintendent,  as  is  the  case  in  many  shops.  A  depart- 
mental separation  has  been  found  to  be  productive  of  far  more 
accuracy,  since  the  heads  of  the  various  departments  will  feel 
perfectly  free  to  present  matters  just  as  they  appear  to  them. 

292.  Duties  and  Qualifications  of  Head  of  Cost  Department— 
It  is  extremely  important  that  the  chief  cost  clerk  or  manager 
of  cost  department  have  time  to  think  and  to  compare.     In  a 
small  establishment  he  may  be  able  to  do  a  considerable  amount 
of  calculation  work,  such  as  extension  of  costs  of  material,  but 
there   are   few   machine-manufacturing   establishments   of  any 
magnitude  which  would  not  find  it  a  decided  advantage  to  have 
available  the  comparative  data  that  are  obtainable  if  the  whole 
time  and  energies  of  a  man  can  be  devoted  to  the  work  of  intel- 
ligent arrangement  and  comparison  of  costs  of  individual  pieces 
and  entire  machines. 

293.  Cost  System  Must  be  Adapted  to  Product.— Costs  may 
be  figured  on  the  basis  of  cost  per  pound  or  unit  of  bulk,  this  cost 


COST  DEPARTMENT  283 

being  subdivided  either  by  cost  per  department,  cost  per  class  of 
material,  or  cost  per  process.  For  continuous  processes  such  as 
steel  mills,  rolling  mills,  cement  mills,  flour  mills,  linseed  oil  mills, 
etc.,  the  aboye  methods  of  calculating  costs  are  the  ones  to  use. 
On  the  other  hand,  in  shops  making  an  assembled  product  com- 
posed of  many  pieces,  such  as  furniture  or  machinery,  the  cost 
system  must  seek  to  secure  costs  per  individual  order  and  per 
component  part. 

294.  Development  of  a  Cost  System. — Generally  the  first 
cost  system  installed  in  a  shop  does  not  seek  to  secure  costs  of 
individual  pieces  nor  to  locate  expenses  by  departments;  the 
object  is  usually  only  to  figure  out  the  cost  of  labor  and  material 
spent  on  any  given  order.  The  next  step  toward  individual 
costs  is  usually  the  obtaining  of  costs  on  groups  of  work — as,  for 
instance,  in  an  electrical  machine,  the  next  natural  step  will 
be  to  secure  separately  the  cost  of  the  armature  and  of  the 
fields.  Then  the  armature  costs  will  want  to  be  divided  again 
into  the  cost  of  commutator,  cost  of  core,  and  cost  of  coils.  As 
the  cost  department  develops  it  will  usually  be  considered  desirous 
to  obtain  the  cost  of  the  labor  on  each  separate  heading  in  the 
various  shop  departments.  Thus  we  might  have  under  the 
heading  of  Armature  Core,  the  labor  items,  "D — $3.49,"  and 
"A — $2.20,"  meaning  that  the  work  of  section  D,  or  the  punching 
department,  amounted  to  $3.49,  and  the  labor  of  section  A,  or  the 
machine  shop,  amounted  to  $2.20. 

Naturally  the  final  development  of  a  cost  system  is  the  figur- 
ing of  the  cost  of  each  individual  piece  as  well  as  of  each  operation 
on  that  piece.  Most  of  the  individual  pieces  will  be  built  on 
separate  stock  orders,  the  manufacturing  quantity  being  regulated 
so  as  to  be  not  too  small  a  number  of  pieces  on  the  one  hand, 
thus  making  the  cost  of  getting  ready,  getting  tools,  blue-prints, 
setting  up  machine  tools,  etc.,  a  relatively  small  item  compared 
with  the  total  cost  of  the  lot.  On  the  other  hand,  the  number 
of  pieces  put  through  on  any  one  stock  order  must  not  be  so  large 
as  to  interfere  with  the  uniform  flow  of  all  component  parts 
through  the  machine  tools  to  the  assembling  and  erecting 
departments.  When  a  suitable  number  of  individual  parts  costs 
have  been  secured,  the  cost  columns  in  a  bill  of  material  are  easily 
filled  out  by  inserting  the  latest  or  most  accurate  individual  piece 
cost  opposite  the  various  parts  and  listing  the  labor  spent 
in  assembling,  erecting,  testing,  cleaning,  boxing,  etc.  These 


284     FACTORY  ORGANIZATION  AND  ADMINISTRATION 

items  are  usually  listed  in  a  summary  at  the  close  of  the  bill  of 
material. 

295.  Merging  Cost  Records  into  Regular  Double  Entry  Ac- 
counts of  Accounting  Department. — This  subject. is  treated  in 
Chapter  V  on  Factory  Accounts,  in  which  the  fundamental 
underlying  philosophy  of  the  subject  is  given.  The  following 
brief  summary  is  here  again  given: 

For  the  purpose  of  merging  all  cost  records  into  the  financial 
accounts,  proceed  in  the  following  manner:  Let  A  represent  the 
value  of  all  labor,  material,  and  total  of  all  expense  percentages 
spent  on  work  in  process  up  to  the  beginning  of  the  period.  Let 
B  represent  the  value  of  all  material,  labor,  and  expense  per- 
centages spent  on  work  in  process  during  the  period.  Let  C 
represent  the  value  of  all  material,  labor,  and  percentages  spent 
on  orders  completed  during  the  period.  Then  A+B  —  C  repre- 
sents the  value  of  the  work  in  process  at  the  beginning  of  the 
next  period. 

"Work  in  Process"  is  Debtor  to  "Material,"  "Labor,"  and 
"Expense,"  respectively,  to  the  extent  of  the  totals  charged  to 
incompleted  orders  during  the  period  on  the  individual  cost 
sheets.  These  amounts  can  be  collected  from  the  cost  sheets  by 
means  of  an  adding  machine. 

"Finished  Product"  or  "Stock"  is  debtor  to  "Work  in  Proc- 
ess," to  the  extent  of  the  sum  total  of  all  orders  completed  during 
the  period. 

The  unclosed  balance  of  the  "Work  in  Process"  account, 
represents  the  inventory  value  of  the  work  in  process. 

"Finished  Product"  or  "Stock"  is  credited  with  the  cost  of 
all  orders  shipped  during  the  period.  The  unclosed  balance  of 
the  "Finished  Product"  account  represents  the  inventory  value 
of  the  finished  product. 

The  unclosed  balance  of  the  "Material"  account  represents 
the  inventory  value  of  material,  and  if  proper  records  of  store- 
room receipts  and  withdrawals  are  kept,  the  balance  of  this 
account  should  not  vary  by  any  wide  percentage  from  the  value 
obtained  as  the  result  of  an  actual  inventory. 

In  case  the  general  accounts  carry  the  entire  pay-roll  in  the 
"Labor"  account,  it  may  be  necessary  to  have  intercharges  be- 
tween "Labor"  and  "Expense." 

The  solution  of  the  problem  of  merging  the  cost  records  into 
the  general  accounts  is,  however,  not  nearly  as  hard  as  is  gen- 


COST  DEPARTMENT 


285 


erally  supposed.  Using  the  above-suggested  scheme  as  the  basis 
for  a  working-plan,  the  problem  can  be  worked  out  without  any 
great  difficulties,  provided  the  head  of  the  cost  department  and 
the  head  of  the  general  bookkeeping  department  work  with  a 
determination  to  co-operate  and  appreciate  each  other's  points 
of  view. 

296.  Material  Costs. — The  basis  for  entries  of  material  costs 
consists  of  the  " orders  on  storeroom"  or  " withdrawal  slips"  or 
stubs  on  the  tags  accompanying  the  raw  material  into  the  shop, 
such  stubs  being  receipted  by  the  party  getting  the  raw  material, 
torn  off  by  the  man  delivering  the  material,  and  by  him  turned 
into  the  stores  department.  The  stores  department,  after  mak- 
ing entries  on  the  stores  records,  turns  withdrawal  slip  or  the 
stub  over  to  the  cost  department. 


RAW  MATERIAL  COSTS 

ARTICLE 

DATE 
OF 
INVOICE 

PURCHASED  FROM 

SIZE 

QUANTITY 

WEIGHT 

PRIC 

:       PEK       ; 

RICE 
ACH 

FIG.  145. — Record  of  raw  material  costs.     White  bond  paper,  9  1/2  inches 
wide,  12  inches  high,  ruled  in  red  and  blue. 

Each  of  these  withdrawal  slips  or  order  on  stores  or  stubs  of 
shop  tag  must  bear  the  proper  order  number  to  which  the  ma- 
terial is  to  be  charged,  and  all  of  them  are  preferably  written 
out  in  advance  of  work  being  done,  such  writing  out  in  advance 
being  done  in  the  Planning  or  Production  Department. 

These  orders  on  stock  are  turned  in  daily  to  the  stores  clerks, 
and  go  from  them  to  the  cost  department.  The  cost  department 
files  all  these  orders  on  stock  and  stubs  of  tags  by  order  number, 
and  when  the  order  is  completed  they  are  taken  out  and  com- 
pared with  the  bill  of  material  if  there  was  such  a  bill  of  material 
written  for  the  order  in  question,  and  the  cost  of  material  figured. 

297.  Raw  Material  Costs. — Fig.  145  shows  a  form  for  keeping 
record  of  raw  material  costs.  It  is  very  important  that  the  cost 
department  keep  an  up-to-date  record  of  raw  material  costs.  A 
simple  way  of  doing  this  is  for  the  purchasing  department  to  let 


286     FACTORY  ORGANIZATION  AND  ADMINISTRATION 

the  cost  department  have  for  a  short  time  every  day  all  invoices 
for  materials.  The  cost  department  makes  entries  from  these 
invoices  in  the  form  shown.  This  form,  it  will  be  noted,  has 
vertical  columns  headed  "Date  of  Invoice,"  " Purchased  from," 
"Size,"  "Quantity,"  "Weight,"  "Price  per,"  and  "Price  Each." 

298.  Costs  of  Manufactured  Component  Parts  Made  in  Quan- 
tity on  Stock  Orders  and  Drawn  from  Storeroom. — In  most 
shops  the  majority  of  the  individual  component  parts  are  made 
up  separately  on  stock  production  orders,  and  as  a  result,  when 
a  machine  or  contract  order  for  which  a  bill  of  material  has  had 
to  be  made,  is  finished,  the  majority  of  component  part  costs  can 
be  taken  as  the  cost  per  piece  of  the  latest  lot  of  components 
made  in  the  shop.     Component  parts  not  made  on  stock  order, 
but  made  on  the  bill-of-material  order  number,  should  have 
labor  and  material  posted  on  individual  component  cards  or 
sheets  filed  back  of  the  guide  card  bearing  the  bill  of  material 
order  number,  thus  providing  individual  component  costs  for 
the  larger  parts.     Care  must  be  taken  in  entering  costs  of  parts 
manufactured  in  quantity  and  drawn  from  stores  to  see  that  the 
Burden  or  Expense  Percentage  or  Rate  is  not  added  twice. 

299.  Current  Value  of  Actual  Invoice  Price  as  Basis  for  Mate- 
rial Costs. — The   question  has   sometimes   been   raised   as  to 
whether  the  material  cost  should  be  applied  at  the  original  pur- 
chase price  of  the  material,  at  the  prevailing  market  price,  or  at 
the  average  prices.     If  the  chief  object  of  the  cost  is  to  establish 
a  selling  price,  then  prevailing  market  price  of  material  should 
be  used.     If  the  chief  object  of  the  cost  is  to  balance  all  manu- 
facturing accounts,  then  the  original  purchase  prices  of  the  ma- 
terial should  be  used. 

300.  "Material  Burden." — Some  cost   accountants  prefer  to 
segregate  from  General  Expense  all  items  connected  with  cost  of 
purchasing,  receiving,  handling  stores  and  stores  accounting, 
lumping  these  items  together  with  Freight  and  Express  and 
Drayage  on  incoming  goods,  to  make  a  total  Material  Burden 
or  Percentage  on  Material  to  be  added  to  flat  material  costs  in 
figuring  total  costs. 

301.  Labor  or  Time  Postings  on  Cost  Records.— Postings  are 
usually  made  from  the  workmen's  time-tickets  or  the  weekly 
time-sheet  on  to  labor  sheets,  similar  to  Fig.  146.     In  the  upper 
right-hand  corner  of  this  form  are  spaces  for  entering  the  sheet 
number,  order  number,  and  mark  number.     There  should  be  a 


COST  DEPARTMENT 


separate  labor  sheet  for  each  piece 
bearing  a  different  mark  number. 
The  sheet  bears  vertical  columns 
headed : "  Check  Number,"  "  Opera- 
tion," "Machine  Number," 
"Hours,"  "Minutes,"  "Labor 
Cost,"  and  "Machine  Cost."  As 
soon  as  all  the  labor  done  during 
any  one  week  has  been  posted  on 
the  labor  sheets,  the  total  labor 
cost  for  each  week  is  added  and 
inserted  on  each  sheet.  The  total 
on  each  sheet  is  then  listed  on  an 
adding  machine  and  checked 
against  the  total  pay-roll.  This 
necessitates  the  adding  of  all  indi- 
rect labor  charged  to  standing  or- 
ders to  the  direct  labor  charged  to 
specific  production  orders. 

Where  individual  job  or  opera- 
tion slips  are  used  they  may  be 
conveniently  filed  in  envelopes  of 
standard  card-index  size,  which 
are  kept  in  card-index  drawers. 
The  envelopes  may  have  a  sum- 
mary of  cost  printed  on  the  face. 

Where  a  weekly  time-sheet  is 
used  the  extension  in  dollars  and 
cents  of  the  time  spent  on  the 
various  operations  and  various  or- 
ders can  be  adjusted  so  that  the 
total  dollars  and  cents  are  the  same 
as  the  men's  weekly  pay  envelope. 
Such  an  adjustment  must  be  pro- 
vided for  where  separate  slips  or 
cards  are  used  for  each  change  of 
job,  or  where  costs  are  extended  in- 
to dollars  and  cents  from  daily  time- 
cards.  In  the  latter  cases,  owing 
to  the  difference  of  extensions  on 
account  of  figuring  and  carrying 


LABOR  SHEET  SHEET  N°  
ORDER  No. 

MARK  No. 

Ul 

z% 

<° 

1 

\ 

ii 

z 

I 

A 

I 

Is 

OPERATION 

Ii 

Ul 

2t- 

|9 

LABOR 
COST 

| 

4 

cc 

X 

So 

Iz 

1 

|o 

288     FACTORY  ORGANIZATION  AND  ADMINISTRATION 

fractional  cents,  there  is  always  some  discrepancy  between  the 
payroll  total  of  dollars  and  cents,  and  the  cost  clerk's  distribu- 
tion of  dollars  and  cents  which  will  have  to  be  adjusted. 

The  time-posting   clerks  should  be  provided  with   a   card- 
index  record  of  employees'  names,  arranged  numerically  in  con- 
secutive order  of  check  numbers.     On  each  card  is  given  the 
man's  name,  the  date  of  starting,  and  his  hourly  rate.     When  the 
man  quits,  this  is  noted  on  the  card,  and  if  another  man  is 
assigned  this  check-number,  entry  is  made  on  the  same  card  of 
the  new  man's  name,  his  rate,  and  the  date  of  starting. 
J  302.  Checking  Labor  Postings  against  Pay-roll. — It  is  en- 
tirely feasible  to  check  the  labor  cost  postings  as  made  against 
Carious    orders,    against    the .  weekly    pay-roll,    thus    assuring 
(that  all  labor  paid  for  is  posted  against  orders.     Where  a  weekly 
/time-sheet  is  used  this  process  is  facilitated. 
I     303.  " Non-productive "  or  " Indirect "  Labor. — "Productive " 
(of  better,  "Direct"  labor  is  usually  such  labor  as  is  directly 
I  spent  in  making  a  given  article.     All  other  labor  which  is  of 
I  a  general  character,  no  matter  how  essential  to  production,  but 
I  which  cannot  be  definitely  assigned  to  a  given  tangible  piece,  or 
I  the  making  of  inventoriable  tangible  assets,  is  designated  as 
I   "Non-productive"  or  "Indirect"  labor.     There  are  also  many 
I    supply  materials  which  are  designated  as ' '  Indirect "  or  "  Expense" 
I    materials. 

/  304.  "Standing  Orders."— "Non-productive"  or  "Indirect" 
/  work  is  usually  taken  care  of  by  a  series  of  "standing"  orders, 
'  which  are  closed  monthly.  A  man  assigned  to  so-called  "non- 
productive" or  "indirect"  work  is  told  to  charge  his  time  to 
Standing  Order  Number  so  and  so.  In  addition  to  the  regular 
standing  orders  which  are  closed  monthly,  it  may  be  found 
desirable  to  issue  special  specific  orders  for  non-productive 
work  whose  cost  it  is  desirable  to  segregate.  It  is  desirable  to 
have  a  distinct  series  for  this  class  of  orders,  so  that  they  can  be 
easily  distinguished  from  the  productive  shop  orders  and  included 
in  the  monthly  total  of  non-productive  work. 

305.  Plant  Additions,  New  Equipment  and  Fixtures. — Items 
which  instead  of  being  maintenance  expenses  are  manifestly  im- 
provements, should  be  built  on  a  special  order  series  so  that  they 
will  be  duly  listed  as  assets  instead  of  as  manufacturing  expense. 

306.  Typical  List  of  "Standing  Orders."— The  following  is  a 
typical  list  of  "Standing  Orders": 


COST  DEPARTMENT  289 

Standing  Order  No.  1 — Repairs  to  Tools. 

Standing  Order  No.  2 — Repairs  to  Shafting  and  Belting. 

Standing  Order  No.  3 — Repairs  to  Lighting  Equipment. 

Standing  Order  No.  4 — Repairs  to  Patterns. 

Standing  Order  No.  5 — Cleaning  Shop  or  Tools. 

Standing  Order  No.  6 — Weighing  or  Handling  Material. 

Standing  Order  No.  7 — Overseeing. 

Fig.  147  is  the  reverse  of  a  time-card  as  used  in  the  shops  of  the 
Pennsylvania  State  College,  showing  the  standing  orders  in  use 
at  that  institution: 

A  uselessly  detailed  and  complicated  system  of  standing  orders 
is  frequently  installed  by  consulting  cost  accountants.  The  best 


^f  There  is  an  order  number  for  every  job.  You  should  be  given 
same  by  Foreman  when  he  gives  you  the  work.  Standing  orders 
are  as  follows: 

1 — Carpenter  Shop  maintenance  and  repairs. 

2 — Wood  Machine  Room  maintenance  and  repairs. 

3 — Forge  Shop  maintenance  and  repairs. 

4 — Foundary  maintenance  and  repairs. 

5 — Machine  Shop  maintenance  and  repairs. 

7 — Clerical  and  drafting. 

9 — Clipping,   Filing  and  Pipe   Fitting  Shop  maintainance 

and  repairs. 

10 — Wood  Turning  Room  maintenance  and  repairs. 
11 — Extra  Janitor  work. 
12 — Extra  Teaching. 
13 — Thesis  work. 

14 — Office  maintenance  and  repairs. 
15 — Apprentices'  time  learning  trades. 
16 — Plumbing  Shop  maintenance  and  repairs. 


FIG.  147. — List   of   standing  non-productive   orders  printed   on  back   of 
time  slip.     Yellow  paper,  3  inches  by  5  inches. 

way  to  stop  leaks  is  to  prevent  them  by  good  management.  De- 
tailed cost  accounting  with  hundreds  of  standing  expense  orders 
will  not  stop  wastes. 

307.  Items  Constituting  Expense  Burden. — Manufacturing 
expense  properly  includes  such  items  as  expense  of  supervision, 
namely,  salaries  of  foremen,  salaries  of  draftsmen,  salaries 
of  men  in  time  and  cost  departments,  salaries  of  men  in  pur- 
chasing department,  salaries  of  men  in  stores  department,  salaries 
of  men  in  shipping  department,  salaries  of  all  men  in  tool- 
making  and  repairing  department,  salaries  for  engineers,  firemen, 
truckers,  elevator  men,  and  packers.  Wages  of  such  help  as  car- 
penters and  painters  ought  to  be  applied  to  specific  shop  orders, 

19 


290     FACTORY  ORGANIZATION  AND  ADMINISTRATION 

such  shop  orders  being  of  the  productive  series  or  of  the  non- 
productive series.  Manufacturing  expense  will  include  such 
items  as  rent,  taxes,  insurance,  water,  light,  fuel,  pattern  material, 
and  wages,  packing  material,  patent  costs,  law  costs,  mem- 
bership in  societies,  experimental  work,  and  miscellaneous 
factory  expense. 

A  committee  on  uniform  cost  accounting  of  the  National 
Machine  Tool  Builders'  Association  made  the  following  recom- 
mendations as  to  the  placing  of  certain  manufacturing  expenses: 

In  the  matter  of  freight,  express,  and  drayage  they  recommend 
including  these  items  in  the  manufacturing  expense  rather  than 
adding  them  to  material  costs,  preferring  the  plan  of  diffusing 
such  costs.  In  the  matter  of  factory  supplies  the  question  was 
raised  about  the  purchase  of  supplies  for  each  month.  These 
should  be  charged  directly  to  the  expense  for  the  month  or  on 
stores  account.  The  committee  recommended  the  adoption  of 
an  average  for  each  month  high  enough  and  based  on  past  expe- 
rience. Under  this  plan  such  purchases  could  be  charged  to 
suspense,  and  each  month  an  equitable  amount  could  be  credited 
off  to  expense.  The  safe  plan  is  to  charge  the  purchases  direct 
to  expense — except  in  certain  cases  where  a  large  stock  is  pur- 
chased ahead. 

In  the  matter  of  Factor  of  Safety,  the  committee  recom- 
mended as  follows:  With  the  greatest  possible  care  in  details 
there  will  always  be  contingencies  of  one  kind  or  another  arising, 
and  to  insure  against  such  unforeseen  yet  possible  differences 
a  Reserve  Account  is  suggested.  Each  period  a  proper  charge, 
possibly  2  per  cent,  should  be  made  to  manufacturing  expense, 
based  on  the  total  of  such  manufacturing  expense  as  it  appears 
before  the  element  of  safety  is  applied.  This  is  intended  to  take 
care  of  general  wastage  throughout  the  shop,  material  leakage, 
breakage  of  material  in  warehouses,  obsolete  castings,  etc.  This 
does  not  refer  to  castings  spoiled  in  the  shop.  These  are  charged 
direct  to  shop  order  as  an  extra  material  item. 

Under  the  heading  of  Interest,  the  committee  considers  it 
incumbent  that  an  amount  should  be  charged  into  the  burden 
element  of  the  cost  of  each  month  equal  to  a  fair  interest  of  the 
value  of  ground,  buildings,  and  plant  equipment,  viz.,  1/12  of 
say  5  per  cent.  We  cannot  commence  to  figure  profit  until  this 
interest  charge  is  first  added  to  the  cost.  The  manufacturer  who 
does  not  own  his  buildings  and  ground  will  charge  rent  instead  of 


COST  DEPARTMENT  291 

interest  on  these  values  into  his  costs.  As  to  the  plant  equip- 
ment, the  mere  fact  that  a  manufacturer  has  this  paid  for  does 
not  relieve  him  of  charging  an  interest  on  it  into  his  costs,  any 
more  than  if  he  had  out  interest-bearing  notes  given  in  payment 
for  it,  or  an  issue  of  interest-bearing  stock  to  cover  this  plant 
equipment.  If  he  never  earns  more  than  a  fair  interest  on  his 
total  investment,  then  he  is  practically  earning  no  profit  by  his 
business  transactions,  since  he  could  get  this  interest  on  his  money 
without  going  into  business.  Therefore  this  interest  should  be 
added  into  the  cost  before  we  put  on  the  profit  which  should 
establish  the  selling  price. 

308.  "Fixed  Charges." — Those  items  of  manufacturing  expense 
which  can  be  predetermined  with  accuracy  for  the  ensuing  year, 
and  which  do  not  change  from  month  to  month  are  frequently 
designated   as    "fixed    charges."    These    charges   include   such 
expenses   as   interest   on   capital   invested,   depreciation,   taxes, 
rentals,    and   insurance.     The    other   items   of    manufacturing 
expense  are  sometimes  designated  as  the  variable  charges. 

309.  "Percentage  on  Labor"  Method  of  Apportioning  Expense 
Burden. — This  method  is  by  far  the  most  prevalent  method  of 
apportioning  the  expense  burden.     If  the  output  and  wages  are 
practically  the  same  year  in  and  year  out  this  method  will  not  be 
far  from  right.     If  such  is  not  the  case,  however,  the  results  as  to 
total  costs  should  be  compared  with  results  given  by  other  methods 
of  apportioning  expenses. 

In  determining  the  expense  percentage  to  be  added  to  the 
cost  of  labor  as  shown  by  the  time  records,  the  simplest  process, 
and  the  one  most  generally  used,  is  that  of  adding  a  uniform  per- 
centage to  the  cost  of  labor  on  all  classes  of  work.  Thus,  if  the 
entire  expense  account  of  a  factory,  including  the  cost  of  unpro- 
ductive labor,  interest,  insurance,  depreciation,  etc.,  is  to  the  cost 
of  productive  labor  as  150  is  to  100,  then  one  and  one-half  times 
the  cost  of  labor  on  any  article  built  in  the  shops  will  be  added 
to  its  cost  as  shown  by  the  bill  of  material  and  time  records, 
in  order  to  obtain  the  total  cost. 

310.  Use  of  Separate  Expense  Percentages  for  Different  Depart- 
ments.— The  foregoing.method,  while  simple,  is  objectionable  be- 
cause it  does  not  differentiate  articles  in  the  manufacture  of  which 
the  more  inexpensive  machines  of  a  plant  are  employed,  from 
articles  involving  the  use  of  very  expensive  machinery.     On  the 
other  hand,  it  adds  a  very  great  amount  to  the  necessary  clerical 


292     FACTORY  ORGANIZATION  AND  ADMINISTRATION 

work  if  a  definite  percentage  is  determined  for  each  tool,   and 
added  daily  to  the  operator's  time. 

311.  Expense  Percentage  Different  for  Different  Kinds  of  Prod- 
uct.— A  compromise  between  these  two  extremes  will  be  found 
in  the  differentiating  of  the  output  of  a  shop  into  several  groups, 
and,  by  carefully  examining  the  purchase  cost  and  expense  of 
operation  of  the  tools  employed  in  the  manufacture  of  each  group, 
similarly  differentiating  the  expense  percentage,  so  that  a  different 
per  cent,  will  be  added  to  the  flat  cost  of  machines  involving 
greater  expense  in  their  manufacture  than  to  the  group  in  which 
less  expense  is  involved.  Thus,  let  us  suppose  that  the  total 
annual  cost  of  productive  labor  in  a  shop  is  $100,000,  and  that 
the  total  expense,  including  unproductive  labor,  interest,  insurance, 
depreciation,  etc.,  amounts  to  $150,000.  We  might  determine 
the  actual  total  cost  of  each  machine  now  by  adding  one  and  one- 
half  times  the  cost  of  labor  as  shown  by  the  time  records.  But 
suppose  we  draw  a  line-  between  the  kinds  of  machines  manufac- 
tured, putting  all  the  larger  and  special  machines  in  a  group  by 
themselves,  and  all  ordinary  small  stock  machines  into  another 
group,  and  find  now  that  the  labor  on  the  large  machines  amounted 
to  $50,000,  and  the  expense  item  on  the  same  machines  amounted 
to  $100,000,  while  in  the  case  of  the  smaller  machines  the  labor 
cost  amounted  to  $50,000,  and  the  expense  item  for  this  group 
was  $50,000.  It  is  evident  that  we  would  cover  our  total  annual 
expense  item  if  we  added  twice  the  cost  of  labor  as  shown  by  the 
time  records  in  the  case  of  the  larger  machines,  and  once  the  cost 
of  labor  for  the  smaller  machines.  It  is  evident  that  the  addition 
of  one  and  one-half  times  the  cost  of  labor  to  all  machines  would 
have  been  misleading,  inasmuch  as  it  would  have  represented  the 
costs  of  the  smaller  machines  as  being  higher  than  they  actually 
were,  and  would  have  shown  the  costs  of  the  larger  machines  at 
too  low  a  figure.  The  addition  of  the  single  percentage  would  be 
quite  likely  to  lead  the  management  to  the  fallacious  conclusion 
that  they  were  unable  to  build  small  machines  at  as  low  a  cost 
as  some  of  their  competitors,  who  confined  their  efforts  altogether 
to  the  smaller  type,  and  might  cause  them  to  allow  their  efforts 
toward  selling  the  smaller  machines  to  flag,  and  thus  lose  a  line 
of  business  which  would  be  in  reality  profitable. 

312.  Hourly  Expense  Rates. — The  progressive  tendency  now- 
adays is  to  charge,  in  the  form  of  hourly  rates,  all  factory  operat- 
ing expenses  outside  of  productive  labor.  The  following  example 


COST  DEPARTMENT  293 

will  show  why  it  is  more  accurate  to  charge  operating  expenses 
by  the  hour  than  as  a  flat  percentage  of  the  productive  labor 
cost : 

Suppose  a  piece  of  work  takes  a  man  30  hours,  and  that  this 
man  is  receiving  20  cents  on  hour;  the  flat  labor  cost  of  the  work 
is  $6.  Suppose  our  operating  expenses  are  100  per  cent,  of  our 
productive  pay-roll  expense,  then  we  must  add  100  per  cent,  of 
flat  labor  to  cover  expense,  or  $6,  making  the  total  actual  cost 
of  the  work  $12. 

Suppose  now  we  employ  a  more  skilful  man  who  does  the  work 
in  20  hours  at  30  cents  an  hour;  the  flat  labor  cost  will  be  $6  as 
before,  and  the  100  per  cent,  added  would  make  the  total  manu- 
facturer's cost  $12. 

If,  however,  we  had  divided  out  total  annual  expense  by  the 
total  number  of  productive  hours  put  in  during  the  year,  and 
had  found  that  the  hourly  expense  rate  was  20  cents  an  hour, 
we  would  figure  the  above  work  as  follows : 

1.  In  the  case  of  a  man  getting  20  cents  an  hour  we  would 
have: 

Flat  labor  cost,  30  hours,  at  $0.20  or $6.00 

Operating  expense,  30  hours,  at  $0.20  or 6.00 

Total  manufacturer's  cost $12 . 00 

2.  With  the  more  skilful  man  we  would  have : 

Flat  labor  cost,  20  hours,  at  $0.30  or $6 . 00 

Operating  expense,  20  hours,  at  $0.20  or 4.00 

Total  manufacturer's  cost $10. 00 

It  is  evident  that  by  using  the  hourly  operating  expense  we 
show,  that  the  higher  priced  mechanic,  who  did  the  work  in  less 
time  than  the  poorer  mechanic,  made  the  job  cost  $10,  whereas 
the  poorer  mechanic,  to  whom  we  paid  the  same  wage  amount, 
made  the  job  cost  us  $12,  because  he  occupied  the  shop  floor 
space  and  used  the  machinery,  power,  and  tools  a  longer  amount 
of  time  than  the  skilled  man. 

A  great  step  toward  accuracy  is  taken  when  a  shop  once 
establishes  an  hourly  operating  expense,  such  operating  expense 
being  based  on  a  grand  total  of  all  items  in  the  expense  account, 
divided  by  the  total  productive  hours  taken  from  all  the  pay- 
rolls during  the  year. 


294     FACTORY  ORGANIZATION  AND  ADMINISTRATION 

313.  Departmental  Hourly  Expense  Rates  or  Local  Burden 
Rates. — Naturally  the  next  step  toward  more  accurate  cost- 
finding  will  be  to  establish  a  general  hourly  operating  rate  which 
applies  to  all  departments  in  the  factory,  keeping  out  of  this  rate 
all  expense  items  which  are  strictly  local  departmental  expenses, 
and  making  out  of  these  local  departmental  expenses  distinct 
hourly  rates,  applying  to  certain  departments  only. 

The  establishment  in  this  way  of  local  burdens,  as  well  as  a 
general  burden  rate,  will  go  far  toward  putting  the  expense  of 
operating  high-priced  and  heavy-power  machinery  where  it 
belongs,  instead  of  diffusing  it  on  bench  work  and  other  work 
which  ought  not  to  carry  the  expense  of  the  machinery  at  all. 

314.  Hourly  Machine  Rates. — This  brings  us  to  the  next 
point  in  development  of  accurate  cost-finding ;  namely,  the  estab- 
lishing of  an  hourly  rate  for  each  separate  machine,  such  rate 
being  distinct  from  and  in  addition  to  the  wage  rate  of  the  man. 

A  number  of  different  considerations  enter  into  the  estab- 
lishment of  the  hourly  machine  rate.  Among  these  are  the  fol- 
lowing: (1)  the  interest  and  depreciation  on  the  purchase  price 
of  the  machine;  (2)  the  annual  cost  of  repairing  the  machine  and 
keeping  it  supplied  with  belts,  lubricants,  and  cutting  tools; 
(3)  the  floor  space  occupied  by  the  machine  and  the  stock  lying 
about  it;  (4)  the  power  consumed  by  the  machine;  (5)  the  number 
of  men  required  to  operate  the  machine. 

With  the  previous  year's  expense  accounts  as  a  basis,  an 
estimate  is  made  of  the  total  amount  to  be  charged  to  the  owner- 
ship, operation,  and  maintenance  of  all  machines.  Out  of  this 
grand  total  or  budget  each  machine  tool  is  given  a  certain  definite 
allowance  or  allotment  for  the  coming  year.  A  card  is  then  writ- 
ten out  for  each  separate  machine  tool,  and  after  determining  ap- 
proximately the  number  of  hours  that  the  machine  will  run  during 
the  year,  its  hourly  operating  rate  is  established  by  dividing  the 
total  budget  by  the  estimated  total  hours  that  the  machine  will 
run.  Every  time  that  the  machine  is  used  it  is  credited  .with 
its  hourly  rate,  the  amounts  being  posted  on  the  card  record 
for  that  machine  tool  from  the  cost  department's  records,  show- 
ing amount  of  time  machine  has  been  used.  If  at  the  end  of  a 
quarterly  or  semi-annual  period  it  is  found  likely  that  the  post- 
ings on  any  card  will  over-run  or  fall  short  of  the  amount  allotted 
the  given  machine,  such  changes  in  various  machine  rates  as  are 
manifestly  equitable  and  necessary  should  be  made. 


COST  DEPARTMENT  295 

A  good  deal  of  confusing  and  unnecessary  detail  has  been  gone 
into  by  several  writers  on  cost  accounting  in  describing  hypo- 
thetical methods  of  incorrectly  figuring  machine  rates  on  the 
basis  that  the  machine  rate  included  all  of  the  factory  expenses 
and  was  the  only  expense  burden  added.  The  machine  rate  has 
been  in  use  many  years  before  these  writers  were  born,  and  has 
been  pretty  accurately  worked  out  independently  of  the  other 
expense  charges  in  such  establishments  as  planing  mills  or  job 
machine  shops. 

315.  Machine  Rate  should  always  be  Separate   and  Inde- 
pendent of  Other  Expenses  not  Connected  with  Ownership  and 
Operation  of  Machines. — When  the  machine  rate  is  used,  it 
is  always  desirable  to  use  a  separate  local  departmental  burden 
rate  for  all  charges  of  a  strictly  local  departmental  nature  and 
not  connected  with  machine  operation.     In  addition  to  the  local 
departmental  rate,  there  should  be  a  general  expense  burden  rate 
which  includes  all  expenses  non-local  or  general  in  their  nature 
and  not  connected  with  either  machine  operation  or  depart- 
mental expenses. 

316.  Wide  Variation  in  Costs  in  same  Establishment  shown 
by   Applying   the   above   Different   Methods   of   Apportioning 
Expense  Burden. — Popular  fiction  has  fascinated  the  average 
reader  by  the  statement  that  modern  cost  accounting  is  so  re- 
fined that  a  fluctuation  in  the  third  decimal  point  marks  the  divid- 
ing line  between  profit  and  loss.     How  absurd  such  statements 
are  can  easily  be  demonstrated  by  applying  the  above-described 
various  methods  of  computing  the  expense  burden  to  the  same 
flat  labor  and  flat  material  costs. 

317.  Importance   of  Manufacturers  in  Same  Industry  using 
Same  Methods  of  Apportioning  Expenses  in  their  Cost  Systems. 
— The  machine  tool  builders,  realizing  the  senseless  competition 
that  arises  from  ignorance  of  real  costs,  agreed  to  use  a  uniform 
system  of  apportioning  expense  burden.     It  would  be  well  if 
other  industries  were  to  follow  this  example. 

318.  Co-operation  between  Accounting  and  Cost  Departments. 
— In  the  matter  of  establishing  the  various  burden  rates  or 
expense  percentages,  it  is  vitally  essential  that  there  be  har- 
monious co-operation  and  mutual  understanding  between  the 
chief  accountant  and  the  head  of  the  cost  department,  a  result 
which  may  require  the  exercise  of  great  diplomacy  for  its  accom- 
plishment.    It  is  necessary  that  the  chief  accountant  recognize 


296     FACTORY  ORGANIZATION  AND  ADMINISTRATION 

the  desirability  of  local  departmental  expenses,  and  the  segre- 
gation in  the  cost  system  of  the  portion  of  each  department's 
pay-roll,  which  is  indirect  labor,  as  well  as  the  material  items 
chargeable  to  local  departmental  up-keep.  He  will  also  have 
to  come  to  an  understanding  with  the  head  of  the  cost  depart- 
ment as  to  each  month's  shop  production  that  constitute  new 
assets  in  the  way  of  standard  drawings,  standard  patterns, 
standard  machine  tools,  standard  and  special  portable  tools, 
office  and  shop  fixtures,  line  shafting,  and  other  plant  additions. 

The  above  matters  are  the  most  difficult  to  adjust  and  agree 
on,  but  if  the  chief  accountant  will  approach  the  matter  with 
a  desire  to  understand  and  co-operate  with  the  chief  cost-keeper, 
and  the  chief  cost-keeper  will  approach  the  matter  in  the  same 
spirit,  neither  scoffing  at  the  other's  ignorance  or  stupidity, 
satisfactory  agreement  can  and  must  be  reached. 

Having  settled  the  portion  of  pay-roll  and  material  which 
will  have  to  go  to  local  departmental  indirect  accounts,  the  next 
step  is  the  agreement  on  what  shall  be  the  monthly  factory  bur- 
den. This  burden  consists  of  the  indirect  charges  not  chargeable 
to  any  one  department,  but  chargeable  to  the  shop  as  a  whole, 
and  includes  such  items  as  interest  and  deterioration,  super- 
visional  salaries,  rent,  machine  depreciation,  and  power  not 
included  in  hourly  machine  rates  if  the  hourly  machine  rate  pre- 
vails, and  if  it  does  not  prevail,  all  rents,  power  charges,  and 
machine  depreciation;  also  light  and  heat,  shop  supplies,  perish- 
able and  semi-perishable  tools,  defective  workmanship,  drayage 
and  freight,  boxing  and  crating,  and  other  miscellaneous  factory 
expenses  already  referred  to. 

In  order  to  see  whether  the  burden  rate  charged  is  sufficient 
to  meet  all  the  expense  items,  it  is  only  necessary  for  the  cost 
department  to  keep  a  large  card  on  which  are  recorded  the 
amounts  of  burden  assigned  to  each  order  as  completed,  these 
amounts  being  totaled  each  month.  If  the  totals  fall  below  the 
accounting  department's  record  to  date  since  the  beginning  of  the 
fiscal  year,  an  advance  in  the  rate  will  be  necessary  to  secure  a 
balance  at  the  end  of  the  year,  and  vice  versa.  Right  here  is 
where  experienced  cost  accountants  are  likely  to  disagree  with 
men  whose  experience  has  been  confined  to  commercial  book- 
keeping as  the  latter  are  apt  to  call  this  burden  rate  adjustment 
"juggling"  or  "doctoring"  of  accounts.  However,  it  appearsto 
be  the  only  way  of  securing  a  balancing  of  cost  and  stores  records 


COST  DEPARTMENT 


297 


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208     FACTORY  ORGANIZATION  AND  ADMINISTRATION 

with  the  commercial  accounts  that  is  consistent  with  a  rational 
cost  of  conducting  stores  and  cost  records. 

319.  Notification  of  Completion  of  Orders. — The  cost  depart- 
ment should  receive  some  systematic   and  prompt  notice   of 
the  finishing  of  every  shop  order  and  every  shipping  order. 
The  cost  department  is  usually  the  final  destination  of  the 
tracing  tag  which  accompanies  a  lot  of  goods  through  the  shop 
to  the  inspection  department  and   storeroom,   the  tag  going 
first  to  the  stores  record  clerks,  and  from  them  to  the  cost  depart- 
ment.    Similarly,  a  copy  of  the  packing  list  covering  every  ship- 
ping order,  such  list  designating  whether  the  shipment  is  partial 
or  complete,  goes  first  to  the  stores  record  clerks,  and  from 
them  to  the  cost  department. 

320.  Cost    Summaries. — Whenever    an    order    is    closed    in 
the   cost   department,    the   labor   sheets    covering   such   order 
are  removed  from  the  files  and  turned  over  to  a  cost-figuring 
clerk.     He  makes  out  a  cost  summary  similar  to  Fig.    148. 


Drawing1 

Part  No. 

Order  No. 

Date 

Quantity 

Labor 

Material 

Expense 

Cost  Ex 

Average 
Cost 

Selling 
Price 

FIG.  149. — Comparative  total  cost  record  of  individual  parts.     White  card, 
8  inches  wide,  4  inches  high. 

This  cost  summary  gives  the  name  of  the  article  and  the  order 
number.  The  labor,  listed  by  operations,  is  divided  into  two 
classes,  the  first  being  labor  on  machine  tools,  the  second  labor 
not  on  machines.  The  labor  report  is  listed  on  the  left-hand 
side  of  the  summary  sheet,  the  right-hand  side  being  reserved  for 
a  report  of  cost  of  raw  materials  and  manufactured  items.  In 
the  lower  left-hand  side  there  is  a  recapitulation  giving  the  total 
labor  on  machine  tools,  total  not  on  machine  tools,  and  total 
burden  or  operating  rate,  also  a  summary  of  material,  giving 
total  of  raw  material,  total  per  cent,  added  to  actual  cost  of  raw 
material,  total  cost  of  manufactured  items,  and  total  manufac- 
turer's cost. 

These  summaries  are  briefly  transcribed  on  to  card  records, 
one  card  for  the  billing  department  and  one  card  for  the  cost 
department;  such  card  records  being  filed  by  the  number  of  the 
part.  A  form  for  this  card  is  shown  in  Fig.  149.  It  bears  col- 


COST  DEPARTMENT 


299 


umns  headed  "Order  Number,"  "Date,"  "Quantity,"  "Labor," 
"Material,"  "Expense,"  "Cost  Each,"  and  "Average  Cost." 
321.  Comparative  Individual  Part  Costs. — The  foregoing  card 
serves  as  a  comparative  cost  record  as  well  as  a  catalogue  or  price 
list  of  individual  parts,  and  is  useful  in  billing  orders  for  supply 
parts  or  in  inserting  prices  of  individual  parts  when  figuring  cost 
of  a  total  machine,  as  per  individual  items  listed  on  the  bill  of 


Comparative  Labor  Costs 
Description 

Piece  Number 

Opera  tioD 
No. 

OPERATION 

Dept. 

No. 

P  W 

D  W 

Vrstiur 
No. 

OPERATION 

Dept. 
No. 

PW 

D  W 

FIG.  150. — Comparative  individual  operation  cost  record. 
7  3/8  inches  wide,  5  inches  high. 


White  card 


material.  An  individual  operation  comparative  cost  card  is 
shown  in  Fig.  150.  Fig.  151  is  arranged  to  contain  a  compara- 
tive cost  of  individual  operations  localized  still  further  in  that  it 
reports  the  man  doing  the  operation  as  well  as  his  regular  and 
premium  wages  on  the  operation. 

For  all  shipping  orders  the  shipping  department's  order  copy 


Dwg.  No.                   Pat.  No,                 Part 

Order 
No. 

Sub-order 

No. 

OPERATION 

No. 
PCS. 

No.  of 
Man 

TIME 

Premium 

Date 

Est'ed 

Saued 

^  

~—~       -~ 

-—— 

=^v^ 

—^ 

—  —  — 

FIG.  151. — Comparative  individual  operation  cost  record  giving  data 
contained  in  form  shown  in  Fig.  120,  and  specifying  in  addition  the  number  of 
pieces  made,  the  man  performing  the  operation,  his  rate  and  premium. 
White  card,  6  inches  wide,  4  inches  high. 

is  sent  to  the  billing  department  with  the  book  previously  referred 
to,  in  which  book  each  order  is  receipted  for.  The  billing  clerk 
inserts  on  this  order  copy  all  selling  prices  which  he  has  on  record 
in  the  card  index  referred  to.  If  there  are  any  items  on  which 
he  has  not  as  yet  costs,  and  consequently  probably  no  selling 
prices,  he  confers  with  the  cost  department,  who  give  especial 
attention  to  getting;  these  prices  figured  immediately. 


300     FACTORY  ORGANIZATION  AND  ADMINISTRATION 


322.  Use  of  Bill  of  Material  as  Cost  Record. — As  previously 
stated,  it  is  advisable  to  provide  for  bills  of  material  separate 
insert  cost  sheets,  so  that  the  bill  of  material  proper  is  not 
burdened  with  cost  columns,  which  will  be  used  in  only  one 
copy  of  the  bill  of  material,  whereas  a  number  of  copies  of  the 
bill  will  go  to  various  shop  departments  to  serve  as  a  list  of  parts 


MAT'L  LIST  RE 
RECORD  COM 

C'D  
pLETFn 

COST 

ORDER  No. 

SHEET 

SHEET 
TOTAL 
CHECK 

No. 

File  No._ 

-n  RY 

Fp  BY 

MATERIAL 
ORDERED 

MATERIAL 
RECEIVED 

WEIGHT 

MATERIAL 
COST 

LABOR 
MRS. 

LABOR 
COST 

TOTAL 

SHIPPED 
DATE    OR 
OR    B^L. 

ISS. 

NUMBER 

P,0™ 

l 

, 

2 

2 

3 

4 

5 

0 

7 

8 

8 

9 

9 

10 

10 

11 

11 

12 

12 

13 

13 

14 

14 

15 

15 

1C 

10 

17 

17 

18 

18 

10 

10 

20 

20 

21 

21 

22 

22 

23 

23 

24 

24 

25 

25 

2C 

20 

27 

27 

28 

28 

29 

29 

30 

30 

31 

31 

FIG.  152. — Insert  cost  sheet  for  bill  of  material  covering  contracts  or 
complete  machine  orders.  White  bond  paper,  8  1/2  inches  wide,  11  inches 
high,  ruled  in  red  and  blue. 

and  assembling  and  erecting  guide.  Fig.  152  shows  an  example 
of  insert  cost  sheet  as  used  for  reporting  the  individual  com- 
ponent part  costs  on  a  bill  of  material.  At  the  end  of  the  bill 
will  be  reported  the  assembling,  erecting,  testing,  painting, 
packing,  etc.,  not  chargeable  to  any  individual  component. 
After  all  extensions  of  costs  of  material  and  of  labor  have 


COST  DEPARTMENT 


301 


been  entered  on  the  bill  of  material,  it  is  turned  over  to  the  mana- 
ger of  the  cost  department.  If  the  bill  of  material  system  has 
been  carefully  followed  out,  and  all  discrepancies  in  material 
attended  to  at  once,  as  soon  as  they  were  made  evident  by  the 
storeroom  entries,  there  need  be  no  delay  in  arriving  at  the  total 
costs,  the  only  operations  necessary  being  the  entering  of  labor 
costs  and  extensions  of  costs  of  material,  so  that  complete  cost 
bills  can  be  had  within  a  day,  or  at  most  two  or  three  days,  after 
completion  of  an  order. 

The  complete  bills  of  material  with  cost  entries  are  conven- 
iently filed  in  "document  file  cases,"  or  in  tariff  files,  a  separate 
case  being  used  for  each  order  series,  viz.,  the  bills  of  material 
for  "A"  orders  being  filed  in  numerical  succession  by  themselves; 
similarly  the  "B"  orders,  etc. 

323.  Comparative  Complete  Machine  or  Assembly  Group 
Costs. — For  quick  reference  to  all  machines  of  similar  type 
and  size,  a  card  index  should  be  kept,  each  card  representing 


Order 
No. 

Complete 

From 
Production 
Oept. 

To  Time 
Clerks 

From  Time 
Clerks 

To 

Manager 

Returned 

Filed 

FIG.  153. — Cost  department's  record  of  location  of  bill  of  material  cost 
records.     White  paper,  71/2  inches  wide,  10  inches  high. 

one  certain  type  and  size  of  machine,  the  order  numbers  being 
entered  as  machines  of  that  particular  size  are  completed.  As 
there  will  be  room  on  the  cards  for  more  than  simply  the  order 
number,  other  brief  entries  may  be  made,  which  will  frequently 
save  reference  to  the  complete  bill.  For  instance,  total  weight, 
total  cost  capacity,  and  speed,  might  be  entered  on  the  same 
lino  after  the  order  number. 

On  receiving  the  complete  cost  bill,  the  cost  clerk  looks  up 
several  similar  machines  on  his  card  index,  and  gets  the  bills 
covering  these  from  the  document  files.  A  careful  comparison, 
item  by  item,  is  now  made  with  the  new  bill  just  turned  in.  Any 
discrepancies  are  investigated  and  accounted  for,  and  a  note 
giving  the  result  of  the  investigation  is  attached  to  the  bill  of 
material,  which  is  now  sent  to  the  general  manager,  being  noted 
by  him  and  returned  again  to  the  cost  department  to  be  filed 
away. 

In  order  to  prevent  delays,  and  to  enable  any  bill  of  material 


302    FACTORY  ORGANIZATION  AND  ADMINISTRATION 

to  be  located  at  any  time,  little  record  books  may  be  kept  by 
the  cost  clerk— one  book  for  each  order  series— in  which  are 
noted  the  dates  on  which  the  bills  of  material  are  received  and 
turned  over  to  the  various  departments  or  clerks,  the  books  being 
ruled  in  accordance  with  Fig.  153. 

324.  Cost  Service  Division.— In  a  large  industrial  establish- 
ment, it  will  be  found  desirable  to  establish  a  Cost  Service  Divi- 
sion, whose  duties  will  consist  of  the  furnishing  to  each  depart- 
ment or  shop  a  complete  analysis  and  distribution  of  all  cost 
factors  affecting  that  shop,  presented  in  the  manner  best  adapted 
to  that  particular  shop  or  department.     In  some  cases  this  will 
involve  the  use  of  graphic  presentations  and  graphs  in  addition 
to  tabulations.     In  some  cases  it  will  mean  comparative  data 
by  operations;  in  others  by  pieces,  and  in  others  by  orders.     This 
information  should  be  furnished  to  the  various  departments  or 
shops  at  the  end  of  each  four  weeks  or  monthly  period.     Facilities 
should  be  provided  whereby  if  a  department  or  shop  head  wants 
a  further  break-down  or  analysis  of  the  reports  which  the  Cost 
Service  Division  furnishes,  such  break-down  can  be  promptly 
furnished.     One  of  the  functional  overseers  in  each  shop  should 
be  designated  as  the  connecting  link  between  the  Cost  Service 
Division  and  the  shop  in  question. 

325.  Competitors'   Prices. — Careful   comparisons   need  to   be 
made  between  the  cost  records  of  a  shop  and  competitors'  prices 
on  complete  machines  and  individual  parts.     The  sales  depart- 
ment should  constantly  be  accumulating  such  data  of  competitors7 
prices  from  their  bids.     In  all  cases  where  it  has  been  quite  posi- 
tively determined  that  prices  have  not  been  "cuts,"  and  it  is 
found  that  they  are  below  what  the  shop  can  afford  to  quote,  it  is 
proper  to  investigate  and  see  if  some  means  cannot  be  found  of 
meeting  the  competitors'  prices.     It  is  not  a  general  rule  that  the 
members  of  a  sales  department  are  in  position  to  ferret  out  for 
themselves  the  methods  of  meeting  such  competition.     It  is  per- 
fectly proper  that  the  sales  department  should  not  confide  its 
own  selling  prices  nor  those  of  its  competitors  to  any  other  depart- 
ment of  the  shop.     It  is,  however,  of  extreme  importance  that 
absolute  truthfulness  be  observed  in  report-ng  to  the  technical 
departments  the  percentage  by  which  a  competitor  has  underbid 
the  shop.    A  collection  of  competitors'  prices  may  demonstrate 
that  certain  machines  or  lines  of  machines  are  costing  the  shop 
more  than  they  ought  to.     It  then  becomes  necessary  to  use 


COST  DEPARTMENT  303 


every  proper  effort  available  to  bring  down  the  cost  of  the  machine, 
and  if  the  cost  is  cut  down  by  legitimate  means,  an  economic 
advantage  has  been  gained  not  only  for  the  shop,  but,  in  a  small 
way,  for  the  trade  at  large.  The  constant  reduction  of  prices 
of  all  manufactured  commodities  is  by  no  means  a  sign  of  a  demoral- 
ized condition  of  trade,  but  is  a  necessary  essential  to  the  world's 
progress.  If  this  condition  is  met  in  a  spirit  of  ill  temper  and 
haste,  it  is  likely  to  result  in  business  failure;  but  if  it  is  taken 
hold  of  with  intelligence  and  caution,  it  means  success  and  pros- 
perity to  the  manufacturer. 

REFERENCES 

BRISCO:  "  Economics  of  Business,"  Chapter  VI. 

GUNN:  "Costs"  in  Humphreys  "Lecture  Notes  on  Business  Engineering." 

ENNIS:  "Works  Management,"  Chapter  II. 

REDFIELD:  "The  New  Industrial  Day,"  Chapters  II,  IV  and  V. 

EVANS:  "Cost-keeping  and  Scientific  Management,"  Chapters  I- VII  in- 
clusive. 

EMERSON:  "Efficiency,"  Chapter  VII. 

GOING:  "Principles  of  Industrial  Engineering,"  Chapters  V  and  VI. 

CHURCH:  "The  Proper  Distribution  of  Expense  Burden." 

CHURCH:  "Production  Factors  in  Cost  Accounting  and  Works  Manage- 
ment." 

DAY:  "Accounting  Practice,"  Part  II. 

WEBNER:  "Factory  Costs,"  Chapters  X-XXVII  inclusive. 

NICHOLSON:  "Factory  Organization  and  Costs,"  Chapters  III  and  IV. 

BUNNELL:  "Cost-keeping  for  Manufacturing  Plants." 

BAUGH:  "Cost  Accounting,"  Pages  135  to  158. 

WILDMAN:  "Cost  Accounting,"  Chapters  XI  to  XIV. 

FACTORY  TRADE  COMMISSION:  "Fundamentals  of  A  cost  System  for 
Manufacturers. ' ' 


CHAPTER  XXIII 
AIDS  IN  TAKING  INVENTORY 

326.  Advantages  of  "Perpetual"  Inventories. — In  an  estab- 
lishment of  sufficient  magnitude  to  justify  the  employment  of  a 
full  and  capable  clerical  force  to  handle  the  records  of  the  cost 
and  stores  department,  stock-taking  is  not  as  formidable  a  matter 
as  in  smaller  concerns.  But  in  many  large  and  prosperous  manu- 
facturing establishments  the  taking  of  an  inventory  is  looked 
forward  to  as  the  most  onerous  task  of  the  year.  It  is  frequently 
months  after  the  date  on  which  the  work  of  inventorying  is 
begun  before  the  final  results  are  announced. 

In  factories  where  labor  cost  postings  are  balanced  against 
the  pay-roll,  where  stores  withdrawals  are  expressed  in  money 
value  as  made,  and  where  Raw  Material,  Work  in  Process,  and 
Finished  Product  accounts  are  charged  and  credited  as  described 
in  Chapters  V  and  XXII,  it  is  feasible  to  have  the  books  closed 
and  inventories  taken  as  often  as  monthly.  The  question  as  to 
how  extensive  a  factory  must  be  in  order  to  justify  the  employ- 
ment of  such  a  full  clerical  force  is  naturally  one  which  depends 
upon  the  complexity  of  the  manufacturing  processes,  and  also 
upon  the  margin  of  profit.  It  is,  however,  true  that  the  com- 
plete cost  analysis  revealed  by  a  full  clerical  force  may  be  in 
itself  the  very  means  of  increasing  the  margin  of  profit.  I  had 
occasion  to  be  shown  the  cost  and  stores  system  of  a  factory 
whose  output  amounted  to  about  $250,000  of  annual  sales.  The 
number  of  persons  doing  the  clerical  work  in  the  establishment 
amounted  to  about  10  per  cent.,  numerically,  of  the  entire  work- 
ing force  of  the  company,  and  it  is  fair  to  assume  that  their  sala- 
ries represented  at  least  an  equal  percentage  of  the  total  wages  ex- 
penditure. At  first  I  said  this  clerical  force  seemed  dispropor- 
tionately large,  and  yet  I  was  assured  by  officials  of  the  company 
that  since  the  introduction  of  this  system  they  were  able  to  adjust 
their  prices  with  a  feeling  of  confidence  that  they  had  never 
before  possessed.  The  books  are  closed,  and  a  complete  report 
of  the  company's  business  is  rendered  to  the  directors  on  the 
tenth  of  each  month  for  all  business  done  during  the  preceding 

304 


AIDS  IN  TAKING  INVENTORY  305 

month.  The  company  has  been  able  to  meet  the  prices  of  all 
competitors  and  to  maintain  a  high  degree  of  mechanical  excel- 
lence, and  to  declare  exceptionally  good  dividends.  The  success- 
ful application  of  the  complete  cost  and  stores  system  to  an  estab- 
lishment of  this  size,  employing  only  about  100  men,  has  strength- 
ened my  conviction  that  the  more  general  adoption  of  these 
methods  in  smaller  factories  will  surely  come,  and  will  be  accom- 
panied by  more  general  confidence  and  satisfaction  on  the  part 
of  both  employers  and  employees. 

There  are,  however,  many  factories  that  are  not  quite  pre- 
pared to  go  so  fully,  or — as  they  would  put  it — plunge  so  deeply 
into  shop-accounting  systems,  but  with  even  an  office  force  of 
minimum  size  the  matter  of  inventory  taking  may  be  simplified 
by  the  use  of  properly  arranged  systems. 

327.  Classification  of  Items  to  be  Inventoried. — In  general 
the  inventory  may  be  divided  into  the  following  classes:  (1) 
Plant;  (2)  Equipment;  (3)  Supplies;  (4)  Raw  Materials;  (5) 
Work  in  Process;  (6)  Finished  Stock;  (7)  Obsolete  Stock;  (8) 
Defective,  Second-hand,  or  Returned  Goods. 

The  items  coming  under  the  head  of  "Plant,"  if  properly 
recorded,  can  be  inventoried  in  a  very  short  time.  Under  this 
heading  will  be  included  real  estate  and  buildings. 

Under  Equipment  will  be  included  such  items  as  power-plant 
apparatus,  transmission  apparatus,  piping,  wiring,  fixtures, 
machinery,  patterns,  drawings,  special  jigs,  and  special  tools. 

Under  the  heading  of  Supplies  will  come  all  such  articles  as 
do  not  enter  into  the  product  or  if  they  do  enter  into  it,  cannot 
be  definitely  measured  for  a  given  part  of  the  product,  but  which 
are  incidental  to  the  processes  of  manufacturing,  such  as  files, 
sand-paper,  emery  cloth,  machine  oil,  soda,  belt  dressing,  etc. 

Under  Raw  Materials  will  be  listed  all  materials  that  enter 
into  the  manufactured  product. 

Work  in  Process  includes  all  manufactured  or  partially  manu- 
factured parts  which  are  found  on  shop  floors  or  benches  at  the 
time  of  taking  inventory. 

Finished  Stock  includes  all  finished  parts  found  in  a  finished 
parts  warehouse.  Also  all  finished  groups  of  parts  or  complete 
articles  ready  for  shipment  found  in  the  stock  warehouse. 

The  other  items  are  self-explanatory. 

It  is  usually  desirable  to  shut  down  the  works  at  the  close  of 

20 


306     FACTORY  ORGANIZATION  AND  ADMINISTRATION 

business  on  a  fixed  date  for  the  purpose  of  taking  inventory,  the 
works  to  remain  shut  down  for  as  many  days  as  experience  has 
shown  to  be  the  minimum  time  to  take  inventory  satisfactorily. 
It  is  always  best  to  take  the  work  in  process  first,  so  that  in  the 
event  that  the  number  of  days  provided  for  in  advance  may  not 
prove  sufficient,  the  checking  of  the  completed  stock  and  raw 
material  will  be  left  to  the  last,  to  be  gotten  hold  of  after  the 
works  have  resumed  operations,  as  this  plan  has  caused  the  least 
inconvenience. 

328.  Tag  System  of  Taking  Annual  Inventory. — It  is  desirable 
to  provide  a  large  number  of  consecutively  numbered  tags,  these 
tags  to  be  given  out  in  bunches  of  100  to  500  tags,  in  such  numbers 
as  may  be  required,  to  the  parties  in  charge  of  the  stock-taking  on 
each  floor  or  in  each  department  of  the  works,  and  it  will  be  the 
duty  of  these  parties,  after  weighing  or  counting  the  stock,  to 
securely  fix  these  tags  to  every  bin,  box,  or  rack,  or  piece  of 
material.    These  tags  will  be  provided  in  different  colors  cor- 
responding to  the  classes  above  outlined. 

When  all  the  stocks,  after  counting  or  weighing,  will  have 
been  tagged  in  this  way,  checkers  will  collect  the  tags. 

A  record  must  be  kept  of  all  tags  given  out  and  to  whom, 
and  all  tags,  whether  spoiled  or  used  or  not,  must  eventually  be 
returned  to  the  checkers. 

329.  Checking  Inventory. — The  manner  of  taking  the  inventory 
must  be  most  thorough  in  every  respect,  so  that  reliable  results 
will  be  obtained;  actual  weight,  quantity,  or  measure  must  be 
applied  in  every  instance  possible.     The  foreman  of  each  depart- 
ment and  a  checker  should  superintend  the  weighing  and  counting 
of  all  material  in  that  department,  and  will  see  that  same  is  correctly 
entered   on  the  inventory  tag.     Where  weighing  or  counting  is 
not  practicable  and  estimates  only  can  be  obtained,  the  foreman 
and  checker  should  agree  upon  the  proper  figure,  and  they  should 
both  put  their  initials  on  the  tag,   which   should  be  marked 
"Estimate." 

It  rests  with  the  foreman  and  checker  to  determine  what  mate- 
rials can  or  cannot  be  estimated  according  to  the  existing  conditions, 
and  no  set  rule  can  be  laid  down.  The  purpose  and  intention 
should  be  to  count  or  weigh  everything  possible. 

As  far  as  possible  all  material  should  be  collected  and  piled 
up  before  taking  inventory,  with  a  view  to  facilitating  a  correct 
and  expeditious  count. 


AIDS  IN  TAKING  INVENTORY 


307 


While  the  inventory  is  in  progress  no  stock  may  be  moved 
from  one  department  to  another. 

330.  Material  in  Transit. — If  it  is  found  after  taking  inventory 
that  material  was  in  transit  for  which  invoices  were  rendered 
bearing  date  of  shipment  previous  to  date  of  inventory,  such 
material  will  be  included  in  the  inventory.  On  the  other  hand, 


INVENTORY  TAG. 


Dept.. 
Bldg. 


-Tag  No. 


Jloor 


Cat. .No. 


Job  No. 


No.  of  Pieces- 
Weight 


Description  of.  Article:  — 
Class 


Sub-Class- 


No,  of  Hrs.  Labor 
Counted  by 


-Checked  by_ 


FIG.  154. — Form  for  inventory  tag.     Colored  tag.     Stock,   41/8  inches 
wide,  7  inches  high. 

care  must  be  taken  that  no  goods  are  booked  or  billed  as  "  Shipped 
Out"  from  the  factory  which  are  all  ready  to  ship  and  then  included 
as  stock  on  hand.  Iff  may  be  necessary  to  ship  goods  on  an  order 
during  the  course  of  the  inventory,  but  a  note  will  be  made 
of  same  and  the  item  included  in  the  final  inventory  properly 
annotated. 


308     FACTORY  ORGANIZATION  AND  ADMINISTRATION 

331.  Classification  of  Work  in  Process  and  Finished  Product— 
A  further  differentiation  of  work  in  process  of  manufacture  and 
finished  stock  is  usually  desirable  by  classes  of  product.    For 
instance,  a  concern  manufacturing  electrical  mining  machinery 
might  have  the  following  classifications:  Class  A,  Chain  Mining 
Machines;  Class  B,  Locomotives;  Class  C,  Generators;  Class  D, 
Long  Wall  Machines;  Class  E,  Drills;  Class  F,  Standard  Motors; 
Class  G,  Switch  Boards;  Class  H,  Hoists,  etc.,  etc. 

The  designation  of  the  material  according  as  it  comes  under 
one  of  these  classes  must  be  clearly  designated  on  the  tag.  A 
form  for  such  inventory  tag  is  shown  in  Fig.  154. 

332.  Units  of  Measurement. — In  recording  raw  material  and 
supplies,   care  must  be  taken   to  see  that  the  proper  unit  of 
measure  is  entered  on  the  tag,  in  stating  the  quantities  on  hand, 
that  is,  the  unit  of  measure  by  which  the  article  is  usually  priced 
and  sold,  whether  pounds,  feet,  dozen,  etc. 

333.  Shop  Order  Numbers  for  Work  in  Process. — In  reporting 
the  work  in  process,  it  is  important  to  give  the  shop  order  number 
as  well  as  catalogue  or  part  number,  and  to  state  clearly  the  con- 
dition of  the  order  as  to  the  value  of  labor  and  amount  of  material 
expended  to  date,  such  information  being  obtained  usually  from 
the  cost  department  records.     All  parts  found  on  the  shop  floor 
or  benches  must  be  considered  as  orders  representing  work  in 
process,  whether  there  appears  to  be  any  labor  performed  or  not  on 
the  job. 

Where  the  number  of  parts  by  actual  count,  found  on  an 
order  in  process,  is  different  from  the  number  called  for  by  the 
order  itself,  the  inventory  should  give  the  actual  weight  or  unit 
of  measure,  and  an  estimate  must  be  made  as  to  the  value  of  labor 
and  material,  such  estimate  possibly  differing  from  the  records 
in  the  cost  department. 

334.  Depreciation  on  Obsolete  Goods. — A  percentage  of  de- 
preciation must  be  agreed  upon  for  obsolete  or  unsalable  stock. 

335.  Collecting  Inventory  Tags. — The  inventory  having  been 
taken,  the  tags  will  be  collected  by  checkers  and  sorted  in  nu- 
merical order,  to  determine  that  none  are  missing,  the  last  tag 
being  clearly  marked  "Last  Tag,  Number " 

The  shop  must  be  carefully  divided  into  divisions,  and  men 
definitely  assigned  with  checkers  to  each  division. 

336.  Sold  Goods. — Completed  machinery,  etc.,  that  has  been 
billed  to  customers,  and  that  is  being  held  subject  to  their  orders, 


AIDS  IN  TAKING  INVENTORY 


309 


must  be  specially  designated  by  a  notation  in  red  pencil  or  in  some 
similar  manner  on  the  tag. 

337.  Classifying  Materials. — For  convenience  in  cataloging,  it 
may  be  found  desirable  to  classify  all  tags  by  class  of  material, 
the  material  when  thus  grouped  or  lumped  being  copied  from  the 
tags  on  to  large  sheets,  the  number  of  the  tag  being  referred  to  in 


EQUIPMENT  INVENTORY  CARD. 


NAME  OF  INSTRUMENT,  MACHINE  OR  FIXTURE 


NAME  OF  MAKER 


FROM   WHOM  PURCHASED 


MAKER'S    NUMBER 


)UR    NUMBER 


DATE  INSTALLED 


FIG.  155. — Equipment  inventory  card.     (Front.)     White  card,   6  inches 
wide,  4  inches  high. 

each  entry  on  these  sheets,  and  all  tags  after  all  entries  are  made 
being  again  rearranged  in  numerical  order,  each  tag  having  been 
marked  with  some  sign  or  stamp  to  designate  that  it  had  been  en- 
tered on  the  inventory  record. 

338.  Equipment  Inventory. — It  is  usually  desirable  to  preserve 


DATE   w 
PURCHASE 

PURCHASE 
VALUE 

COST 
FREIGHT 

COST 
NSTALLING 

COST 
FIXTURES 

COST 
REPAIRS 

DATE 
REPAIRS 

TOTAL 
COST 

CHARGE  ( 
DEPREC 

AMOUNT 

)FF   FOR 
ATION 
DATE 

VALUE 

DATE 

^  

FIG.  156.— Equipment  inventory  card,  reverse.     (See  Fig.   126.)     White 
card,  6  inches  wide,  4  inches  high,  ruled  in  red  and  blue. 


a  permanent  card  record  covering  equipment  items,  a  distinct 
card  being  kept  for  each  equipment  item  on  which  is  recorded 
such  description  as  "Symbol,"  "Maker,"  "From  whom  bought," 
"Date  put  in  use,"  "Improvements  or  Repairs,"  as  may  be 
advisable.  A  form  for  such  record  is  shown  in  Fig.  155,  and  the 
reverse  of  the  form  is  shown  in  Fig.  156. 


310     FACTORY  ORGANIZATION  AND  ADMINISTRATION 

339.  Depreciation  and  Repairs  on  Equipment. — On  the  reverse 
as  shown  are  recorded  cost  of  repairs  or  amount  of  annual  de- 
preciation, and  the  balance  showing  latest  inventory  value. 


ORIGINAL 


INVENTORY  TAG 


DEPT.  No.. 
B'L'D'G  _ 


JTAG  No,_ 


.FLOOFL 


_SEC'N_ 


CAT.  No.. 


_SIZE_ 


NAME. 


No.  P'C'S. 


.MUL'PJ 


MATERIAL 


OPERATIONS  PERFORMED. 


ARE  PARTS 
ASSEMBLED! 


ASSEMBLING 
.OPERATION 


WEIGHT  (LBS.) 

AVERAGE. 

CROSS 

PC'S 

TARE 

POUNDS 

NFT 

Wt.  per  100  Pr_'s 

COUNTED  BY- 


ENTERED  IN  RECORD  BY- 


N.B.-AII  Tags  Must  be  Accounted  for. 


FIG.  157. — "Original"  or  upper  sheet  of  inventory  tag.  Fastened  to 
"duplicate"  tag  shown  in  Fig.  158  by  reinforced  eyelet  and  perforated 
along  line  A-B.  Original  buff  bond  paper  ,4  1/2  inches  wide,  7  3/4  inches 
high. 

340.  Duplicate  Inventory  Tags. — Some  appraisal  companies 
use  a  tag  with  a  perforated,  removable,  duplicate  strip  attached, 


AIDS  IN  TAKING  INVENTORY 


311 


writing  the  tags  in  duplicate  with  a  piece  of  carbon,  and  remov- 
ing the  perforated  strip  immediately  after  writing  out  the  tag. 


o 


DUPLICATE. 

INVENTORY  TAG 


DEP'T  No. 
B'L'D'G 


JTAG  No. 


_FLOOR_ 


.SEC'N. 


CAT.  No. 


.SIZE. 


NAM! 


No.  P'C'S. 


JVIUL'EJ 


MATERIAL 


OPERATIONS    PERFORMED. 


ARE  PARTS 
ASSEMBLED?- 


ASSEMBLING 
-OPERATION- 


WEIGHT  (LI 


GROSS 
TARE. 
NET- 


PC 'S- 


-Wt.  Per  100  PC'S 


COUNTED  BY. 


_A.PP'D  BY_ 


_F'MAN 


ENTERED  IN  RECORD  BY_ 


IM.B.-This  Duplicate  Must  Not  be  Detached  from  Stock. 


FIG.  158. — "Duplicate"  inventory  tag.  Fastened  together  with  "orig- 
inal" by  reinforced  eyelet.  (See  Fig.  157.)  Manila  tag  stock,  4  1/2  inches 
wide,  7  3/4  inches  high. 

This  lessens  the  liability  of  errors  due  to  lost  tags.     A  form  for 
such  a  tag  is  shown  in  Figs.  157  and  158. 

341.  Proper  Percentage  of  Depreciation. — The  proper  per- 
centage of  depreciation  to  be  used  for  various  classes  of  equip- 


312     FACTORY  ORGANIZATION  AND  ADMINISTRATION 

ment  is  a  matter  which  has  been  discussed  at  length  by  various 
writers.  Experiments  have  been  made  to  determine  the  average 
life  of  various  tools.  It  is  evident,  however,  that  the  length 
of  life  and  rapidity  of  deterioration  of  machinery  and  trans- 
mission parts  will  vary  widely.  Where  trustworthy  data 
based  upon  a  number  of  years  of  observation  are  not  at  hand,  it 
has  been  customary  to  allow  a  general  depreciation  of  10  per 
cent,  per  annum  on  all  machines.  On  belting  and  transmission 
apparatus  in  general,  a  slightly  larger  depreciation  is  sometimes 
charged,  varying  according  to  the  service.  Buildings  kept  in 
good  repair  are  often  charged  with  a  very  low  percentage  of 
depreciation. 

342.  Inventorying  Patterns  and  Drawings. — The  real  value 
of  patterns  and  drawings  as  an  asset  is  a  matter  over  which 
there  is  considerable  difference   of  opinion.     Special   patterns 
and  drawings  are  charged  to  the  particular  order  for  which 
they  are  made,  and  then  can  be  of  no  value  except  as  scrap. 
On  the  other  hand,  standard  patterns  and  drawings  have  a  real 
value  which  should  be  subject  to  considerable   depreciation. 
Where  the  value  of  standard  drawings  and  patterns  is  not  kept 
for  each  piece,  but  all  work  on  such  patterns  and  drawings  is 
charged  on  a  standing  order  number,  the  total  cost  of  all  new 
standard  patterns  and  drawings  for  the  year  is  given  by  a  stand- 
ing order,  and  this  total  added  to  the  properly  depreciated  value 
of  the  standard  patterns  on  hand  at  the  close  of  the  previous 
year  will  give  the  current  value.     This  method,  of  course,  does 
not  assign  a  definite  price  to  each  individual  pattern  and  drawing. 

The  valuing  of  goods  is  facilitated  by  the  cost  department 
having  on  hand  lists  of  all  standard  materials  with  the  prevalent 
net  price  reduced  to  a  price  per  unit  of  measure  or  weight. 

343.  Perpetual  Inventories  to  be  Verified  by  Actual  Count.— 
At  the  beginning  of  this  discussion  it  was  stated  that  the  tak- 
ing of  an  inventory  is  greatly  facilitated  by  the  keeping  up 
of  accurate  stores  records.     It  must  not  be  assumed  that  the 
stores  records  may  be  taken  as  inventory  values.     All  systems 
of  mathematical  record  need  to  be  checked  annually  by  an  actual 
count.    Such  actual  count  may  be  made  the  basis  of  just  as 
thorough  an  inventory  as  could  be  taken  by  an  outside  appraisal 
company.     In  fact,  where  it  is  customary  for  the  sake  of  furnish- 
ing what  would  appear  to  be  absolutely  unprejudiced  and  un- 
biased values  by  employing  an  outside  appraisal  company,  the 


AIDS  IN  TAKING  INVENTORY  313 

work  of  such  appraisal  company  is  made  much  easier  and  more 
accurate  in  establishments  where  inventories  taken  by  the  regular 
force  of  the  company  have  been  thorough  and  systematic. 

344.  "Replacement"  Values. — In  attaching  values  to  factory 
fixtures,  special  tools  and  other  items  which  are  essential  parts 
of  the  plant,  it  is  customary  to  value  them  at  what  it  would 
cost  to  replace  them  in  their  present  condition,  and  to  consider 
their  worth  on  a  basis  of  what  value  they  would  have  to  a  com- 
pany engaging  in  the  same  line  of  business  on  the  same  premises, 
and  not  the  figures  that  articles  would  bring  if  sold  at  a  forced 
sale. 

345.  Cost  System  as  an  Aid  to  Inventorying. — The  accuracy 
of  the  inventory  prices  attached  to  finished  and  unfinished  parts 
depends   upon   the    cost-calculating    system    employed.     If   a 
company's  cost  records  are  known  to  be  correctly  kept,  then  the 
rational  way  to  obtain  the  cost  of  unfinished  parts  would  be  to 
close  up  to  inventory  date  all  time  and  material  records  on  all 
unfinished  orders.     With  a  cost  system  in  which  the  costs  of 
individual  parts  have  been  built  up,  recorded,  and  compared, 
these  costs  serve  as  the  basis  of  accurate  inventory  valuation. 

346.  Congested   and   Disorderly   Stock-rooms. — One   of  the 
greatest   disadvantages  from  which   inventory  taking   usually 
suffers  is  that   due   to   extremely   congested   stock-rooms  and 
stock   floor.     Another   great    disadvantage    will   be   found   in 
lack  of  promptness  in  identifying  items  on  the  shop  floor  and 
leaving  them  without  identifying  tags. 

The  mere  issuing  of  instructions  to  foremen  to  see  that  floors 
and  benches  are  cleaned  up  and  stock  neatly  arranged  is  not 
sufficient ;  it  may  be  necessary  to  hire  special  help  to  see  that  this 
work  is  actually  carried  out.  Previous  to  inventory  time  as 
much  useless  material  as  possible  should  be  scrapped. 

The  person  in  charge  of  each  department  and  the  checker 
for  that  department  must,  under  no  circumstances,  let  a  piece 
pass  by  without  tagging  it,  with  the  idea  that  they  will  look  it 
up  afterward. 

347.  Precautions  Regarding  Inventory  Taking. — The  following 
list  of  precautions  will  be  found  serviceable  in  connection  with 
inventory  taking: 

At  a  period  of  time  not  later  than  two  months  previous  to 
the  date  of  the  inventory,  every  bin  and  every  class  of  article 
in  every  warehouse  and  stock-room  must  be  labeled  with  its 


314     FACTORY  ORGANIZATION  AND  ADMINISTRATION 

proper  name  and  mark  number,  if  there  is  any;  pattern  number, 
if  there  is  any;  also,  where  two  units  of  measurement  are  required, 
such  as  number  of  feet  and  pounds,  the  label  or  tag  must  bear 
the  weight  per  foot,  or  whatever  the  conditions  require. 

(1)  The  head  stock-keeper  will,  at  the  time  above  indicated, 
check  up  each  bin  and  item,  and  see  that  these  labels  are  pro- 
vided, so  that  the  stock-taking  can  be  done  by  any  clerk  copying 
the  information  on  the  bin  labels  or  tags. 

(2)  A  complete  finding  list  must  be  provided  by  the  head 
stock-keeper  at  this  time.     This  finding  list  must  catalogue  all 
material,  whether  it  is  purchased  finished  stock,  or  whether  it 
is  stock  manufactured  by  the  company,  such  finding  list  giving, 
after  each  item,  the  number  of  the  bin  in  which  it  is  located. 
The  preparation  of  such  a  finding  list  will  prevent  articles  of  the 
same  class  being  stored  in  different  bins. 

(3)  The  shop  foremen  must  get  under  benches  and  into  pigeon- 
holes and  get  out  all  unlabeled  and  unidentified  material.     The 
shop  floor  must  be  cleared  of  everything,  except  work  in  process. 
The  personal  co-operation  of  the  shop  disciplinary  heads  must 
be  used  to  see  that  this  is  done.     Unless  vigorous  steps  are  taken 
to  enforce  this  clearing  up,  it  will  be  extremely  difficult  to  take 
stock  accurately. 

(4)  Method  o]  Taking. — The  method  of  taking  the  inventory" 
shall  be  as  follows: 

(Use  copying  pencils  in  making  all  records.) 

Squads. — Each  overseer  shall  appoint  a  number  "of  squads 
(as  many  as  necessary)  to  each  portion  of  the  factory  under  his 
charge.  Each  squad  shall  consist  of  a  "  Counter, "  a  "Recorder" 
and  a  "  Checker, "  together  with  as  many  laborers  as  shall  be 
deemed  necessary  for  trucking,  weighing,  etc. 

Duties. — The  duties  of  these  men  shall  be  as  follows: 

Counter. — The  Counter  shall  do  or  shall  supervise  all  of  the 
counting  and  weighing  necessary  for  the  inventory,  and  shall 
call  off  all  figures,  descriptions,  and  other  data  to  the  Recording 
Clerk. 

Recorder. — The  Recorder  shall  do  all  of  the  recording,  making 
his  entries  on  the  Inventory  Card  as  the  Counter  calls  off  to  him. 
As  each  item  is  completely  recorded  he  shall  leave  the  Inventory 
Card  with  the  article  which  has  been  inventoried.  Where 
possible  he  should  verify  as  he  records. 

Checker.— It  shall  be  the  duty  of  the  Checker  to  follow  the 


AIDS  IN  TAKING  INVENTORY  315 

squad  collecting  the  Inventory  Cards  that  have  been  placed  with 
the  items  inventoried  by  the  Counting  and  Recording  Clerks. 
He  shall  inspect  each  card  and  shall  check  each  notation  specified 
with  the  article  it  records.  If  in  checking  Location,  Article, 
Description,  Quantity,  etc.  any  errors  are  discovered  these 
shall  be  carefully  corrected.  As  he  removes  the  Inventory  Card 
he  shall  leave  in  its  place  an  Inventory  Taken  Slip  on  which  he 
shall  place  the  number  of  the  Inventory  Card  which  he  has  re- 
moved. He  shall  check  the  cards  which  he  has  taken  up  to  see 
that  none  have  been  overlooked]  and  shall  take  immediate 
steps  to  recover  any  which  he  shall  find  missing.  He  shall  not 
work  immediately  with  the  squad  but  shall  remain  behind  and 
work  independently. 

(5)  The  head  of  the  cost  department  will  receive  the  num- 
bered inventory  tags,  and  put  them  under  lock  and  key.     When 
he  issues  these  tags  he  will  take  a  written  receipt  from  each 
person  to  whom  he  issues  them.     He  will  issue  these  in  lots  not 
to  exceed  500  at  one  time. 

(6)  These  inventory  tags  will  have  carbonized  slips  with  the 
same  printing  on  them  as  is  on  the  face  of  the  tag,  stitched  to 
the  tag.     These  carbonized  tags  will  be  torn  off  as  the  tags  are 
written  up  and  kept  on  file  by  the  person  detaching  the  tags. 
This  will  secure  a  duplicate  of  the  tag  being  on  file,  so  that,  in 
case  any  tag  is  lost,  it  will  be  known  what  was  written  thereon. 

(7)  At  a  period  not  later  than  one  month  previous  to  the 
figuring  of  the  inventory,  a  complete  price  catalogue  should  be 
in  readiness,  such  price  catalogue  containing  the  very  latest 
prices  of  all  raw  material.     This  catalogue  should  list  every  item 
appearing  in  the  last  preceding  inventory. 

(8)  The  shop  costs  must  be  figured  up  to  date  on  all  completed 
and  uncompleted  orders,  so  that  it  will  not  be  necessary  to  esti- 
mate the  time  spent  on  work  in  process. 

(9)  At  a  period  not  later  than  thirty  days  before  stock-taking, 
every  order  which  the  records  show  to  be  a  "live  order"  must  be 
checked  in  the  shop  so  that  there  is  a  certainty  of  its  being  in 
actual  existence  in  the  shop. 

(10)  In  order  to  distribute  the  work  of  stock-taking  in  such 
a  manner  as  not  to  over-burden  any  one  department,  the  work 
should  be  allotted  as  follows :  The  head  cost  clerk  will  be  in  gen- 
eral charge  of  the  inventory;  the  receiving  department  will 
take  stock  of  all  raw  material;  the  stores  department  will  take 


316      FACTORY  ORGANIZATION  AND  ADMINISTRATION 

stock  of  all  supplies  and  finished  stock;  and  the  cost  department 
will  take  stock  of  all  work  in  process. 

(11)  The  men  who  wrote  certain  inventory  tags  will  accompany 
the  checkers  who  collect  these  tags;  they  will  have  their  dupli- 
cates to  assist  them  in  accounting  for  any  missing  tags. 

(12)  Work  in  process  should  be  figured  from  the  cost  depart- 
ment records.     Articles  on  the  shop  floor  nevertheless  should  be 
tagged  and  the  tags  collected  just  as  soon  as  all  items  have  been 
tagged  and  checked.     This  will  permit  of  a  check  of  the  work 
in  process,  as  shown  by  the  tags,  against  the  same  as  shown  by 
the  cost  department  records  of  uncompleted  orders. 

(13)  All  figuring  of  prices,  weights,  etc.,  should  be  done  on 
the  tags  themselves.     Also  all  arrangements  of  lists  of  stores,  by 
sizes,  etc.,  previous  to  any  copying  on  the  sheets,  are  to  be  the 
result  of  sorting  of  tags. 

(14)  The  transcribing  should  be  done  very  carefully  in  ink 
on  the  permanent  record  sheets,  to  be  placed  in  a  substantial 
binder.     This  will  constitute  the  permanent  inventory,  and  may 
be  copied  on  the  typewriter  in  manifold. 

REFERENCES 

PARKHTJRST:  "Applied  Methods  of  Scientific  Management,"  Chapter  V. 
BRISCO:  "Economics  of  Business,"  Chapter  VIII. 
WEBNER:    "Factory  Costs,"  §235. 


CHAPTER  XXIV 

INSPECTION  METHODS  IN  MODERN  MACHINE 
SHOPS 

348.  General    Classification    of    Inspection. — The    work    of 
inspection  naturally  divides  itself  into  two  groups : 

(a)  That  having  to  do  with  raw  materials  and  purchased  parts. 

(b)  Inspection  having  to  do  with  manufactured  .product. 

349.  Inspection  of  Raw  Materials  and  Purchased  Items.— 
In  order  that  raw  material  and  purchased  parts  may  be  satis- 
factorily inspected,  it  is  necessary  that  the  purchaser's  require- 
ments be  specifically  set  forth.     This  consideration  demands  the 
preparation  of  specifications.     The  preparation  of  such  speci- 
fications for  a  given  shop  is  a  matter  which  requires  a  careful 
investigation  of  past  experiences.    The  person  writing  such  speci- 
fications should  consult  all  possible  sources  of  information  as  to 
what  has  been  past  experience  with  respect  to  troubles  and  diffi- 
culties in  connection  with  any  given  material  or  part.     This  is 
necessary  in  order  that  the  specifications  may  be  not  only  correct 
from  a  theoretical  standpoint,  but  in  order  that  they  may  be 
practical  as  well.     A  draftsman,  foreman,  or  a  salesman  may  be 
able  to  give  useful  information  in  connection  with  the  preparation 
of  specifications  for  purchased  material. 

If  the  establishment  is  large  enough  to  have  a  testing  labora- 
tory of  its  own,  such  a  laboratory  will  prepare  these  specifications 
in  conjunction  with  the  various  engineers  of  the  company. 

In  the  inspection  of  raw  material  we  have  to  cover  two  general 
features : 

(1)  Quality  as  depending  on  composition. 

(2)  Quality  as  to  dimensions. 

Inspection  as  to  composition  may  come  under  four  classes  of 
requirements : 

(1)  Physical. 

(2)  Chemical. 

(3)  Magnetic    or    electric. 

(4)  Metallurgical. 

317 


318      FACTORY  ORGANIZATION  AND  ADMINISTRATION 

Inspection  as  to  dimensions  and  form  would  apply  more  par- 
ticularly to  castings  or  finished  parts  which  must  coincide  with 
drawings  or  other  specifications. 

Raw  material  purchased  in  large  quantities  may  sometimes 
be  best  inspected,  as  to  composition  and  manufacture,  at  the 
plant  of  the  maker,  so  far  as  physical  qualities  are  concerned. 

Chemical,  magnetic,  or  electric  qualities  are  best  tested  in  a 
laboratory  which  may  be  part  of  the  organization  of  the  company 
making  the  specifications,  or  it  may  be  done  in  a  commercial 
laboratory  conducting  testing  for  outside  clients. 

Such  articles  as  bar,  sheet,  and  other  stock  may  be  inspected 
in  the  receiving  department  as  to  quality,  size,  shape,  and 
general  appearance  of  material.  This  class  of  inspection, 
although  usually  conducted  by  non-technical  help,  is  about  all 
that  can  be  done  with  regard  to  materials  received  in  small 
quantity,  as  the  cost  of  technical  inspection  would  be  too  high. 

350.  Inspection  of  Manufactured  Product. — The  inspection 
of  manufactured  product  divides  itself  up  into : 

(1)  Dimensional  inspection  during  the  course  of  manufacture. 

(2)  Inspection  of  groups  of  parts. 

(3)  Erection  inspection. 

(4)  Electric  or  magnetic  inspection  and  testing. 

(5)  Final  inspection  and  testing  of  complete  machines. 

351.  Dimensional    Inspection. — Some    few   American    shops 
make  a  dimensional  inspection  after  every  machine-shop  opera- 
tion.    Where  this  is  the  practice  it  is  necessary  to  have  a  repre- 
sentative of  the  inspection  department  visit  every  leading  factory 
department  at  regular  intervals.     The  record  of  the  inspection  is 
made  by  having  the.  inspector  write  his  name  or  initials  after  the 
operation  which  the  inspection  covers,  as  listed  on  the  routing 
tag  accompanying  the  pieces  during  their  process  of  manufacture. 
In  some  shops  the  inspector  accompanies  the  "move  material 
men,"  motor  trucks  being  used. 

In  many  shops,  however,  it  is  not  necessary  to  conduct  a  dimen- 
sional inspection  after  every  operation,  nor,  indeed,  is  it  necessary 
to  inspect  all  parts.  In  many  cases  it  will  be  satisfactory  if 
only  such  parts  as  are  subject  to  renewal  are  inspected  when  all 
machine-shop  operations  are  finished.  Such  parts  may  be  desig- 
nated by  the  engineering  department  on  the  bill  of  material. 
As  the  routing  or  tracing  tag  is  usually  copied  from  the  bill  of 
material  the  tag  will  call  attention  to  the  required  inspection. 


INSPECTION  METHODS  IN  MODERN  MACHINE  SHOPS  319 

352.  Floor  Inspection. — In  addition  to  the  floor  inspection  of 
such  pieces  as  require  inspection  during  process  of  manufacture, 
this  requirement  being  designated  on  the  bill  of  material  and  shop 
routing  tag,  as  indicated,  it  is  advisable  that  all  manufactured 
parts,  before  going  into  a  permanent  stock-room  of  finished  parts, 
or  into  a  temporary  stock,  from  which  they  may  be  drawn  for 
assembling  or  erecting  purposes,  should  pass  through  an  inspec- 
tion  department  which  will  check   the   parts  with    the   blue- 
prints with  such  degree  of  accuracy  as  the  judgment  of  the  head 
inspector  will  dictate. 

353.  Verification  of  Inspection. — Small  articles  made  in  quan- 
tity and  going  into  the  stock-room  may  have  the  inspection  of  the 
lot  verified  on  the  routing  tag.     In  case  of  larger  pieces  these 
should  be  stamped  individually  with  a  steel  stamp  bearing  the 
inspector's  distinct  symbol. 

Stock-keepers  and  assemblers  must  not  accept  pieces  on  which 
inspection  is  required,  without  proof  of  inspection.  The  with- 
drawal of  a  part  from  a  stock-room  naturally  assumes  that  such 
piece  has  been  inspected  before  it  was  accepted  in  the  stock- 
room. It  is  important  that  such  pieces  as  go  direct  to  assem- 
bling or  erection,  without  first  going  to  a  stock-room,  have  the 
inspector's  symbol  stamped  upon  them,  or  upon  the  tag  accom- 
panying them. 

354.  Altering    Inspected    Parts. — Assemblers    and    erectors 
must  be  prohibited  from  using  files  or  other  tools  to  alter  parts 
already  finished  and  supposed  to-  be  correct.     If  parts  will  not 
assemble,  the  inspection  department  must  be  notified. 

355.  Inspection  of  Assembled  Groups. — As  regards  the  in- 
spection of  groups  of  parts  it  may  be  necessary  in  many  cases 
to  have  an  inspector  inspect  all  the  component  parts  of  a  group 
previous  to  assembling  into  groups.     Such  groups  and  speci- 
fied component  parts  should  be  designated  on  the  bill  of  material 
by  the  engineering  department. 

Such  parts  of  groups  as  must  be  accurate  in  order  to  make 
assembling  possible  without  alteration  by  assemblers  must 
be  designated  as  to  the  required  inspection  on  the  bill  of 
material. 

356.  Erection  Inspection. — In  regard  to  erection  inspection  it 
is  necessary  that  an  inspector  exercise  close  scrutiny  over  machines 
while  in  process  of  erection.     He  must  report  defects  to  the  de- 
partment foreman,  and  the  department  foreman  and  workman 


320      FACTORY  ORGANIZATION  AND  ADMINISTRATION 

must  lend  any  assistance  necessary  for  the  proper  performance  of 
the  inspector's  duty. 

357.  Electrical  Inspection. — As  regards  electrical  inspection, 
all  parts  having  electrical  functions  are  best  tested  as  independent 
parts  before  assembling.     This  applies  to  such  parts  as  windings, 
coils,  resistances,  etc.     In  order  to  be  doubly  sure,  and  in  order  to 
prevent  dissatisfaction  on  the  part  of  customers  ordering  repair 
parts,  it  is  often  advisable  also  to  apply  alternating  current,  high 
voltage  to  all  electric  current  carrying  parts,  prior  to  their  ship- 
ment as  renewals,  and  also  to  make  a  magneto  test  of  armatures 
and  commutators  prior  to  shipment,  so  as  to  locate  any  possible 
short-circuits.    The  same  precautions  as  to  an  additional  test  at 
the  time  of  issuing  of  electrical  parts  from  a  stock-room  to  shop 
for  assembling  may  be  considered  advisable. 

As  regards  the  inspection  of  assembled  groups  of  electrical 
parts  as  to  accuracy  of  connections,  where  such  inspection  is 
advisable,  inspectors  should  be  furnished  with  diagrams  showing 
the  connections,  such  diagrams  to  be  made  by  the  engineering 
department. 

358.  Metallurgical    Inspection. — In    all    manufacturing    in- 
volving heat  treatment,  punching  or  drawing  of  steel  or  brass  or 
other  alloys,  it  is  customary  to  have  a  metallurgical  division  of  the 
inspection  department,  which  carries  on  metallographic  tests 
with  the  aid  of  microphotography.     The  organization  of  the 
metallurgical  division  and  its  records  will  have  to  be  planned  so 
that  the  complete  test  record  or  history  of  each  unit  such  as  an 
ingot,  forging,  etc.  can  be  studied.     This  history  would  involve  a 
comparison  of  chemical,  metallurgical,  and  physical  test  data. 
In  addition  to  the  micro-photographic  data,  it  is  desirable  to 
have  on  file  the  charts  of  recording  pyrometers  in  the  various 
heat  treatment  furnaces,  so  that  the  resultant  strength  and  elas- 
ticity of  materials  can  be  compared  with  the  speed  and  intensity 
of  heating  and  cooling,  as  well  as  crystalline  structure  indicated 
by  the  micro-photograph. 

In  the  steel  industry  the  history  usually  begins  with  the  heat 
of  the  furnace,  which  is  assigned  a  number;  also  a  record  of  the 
ingots  which  are  assigned  numbers,  all  subsequent  forgings  or 
rolled  bars  being  stamped  so  as  to  identify  them  back  to  the 
ingot  and  heat  from  which  they  originated. 

359.  Final  Inspection  and  Test  of  Complete  Machines.— The 
final  inspection  and  test  of  complete  machines  should  be  con- 


INSPECTION     METHODS  IN  MODERN  MACHINE  SHOPS  321 

ducted  in  accordance  with  instructions  furnished  by  the  engi- 
neering department,  who  should  also  prepare  complete  data 
sheets  and  log  sheets  covering  the  final  inspection  and  test. 

360.  Organization  of  Inspection  Department. — As  regards  the 
organization  of  the  inspection  department,  it  is  pretty  generally 
agreed  that  this  department  must  be  independent  of  any  shop 
control.     If  the  inspection  department  must  be  either  under  the 
shop  superintendent  or  the  chief  engineer,  it  is  far  better  to  have 
it  under  the  chief  engineer,  because  if  the  inspectors  were  part 
of  the  shop  organization,  the  tendency  would  be  to  conform  to 
the  ideas  of  the  various  department  foremen  rather  than  to  the 
letter  of  the  specifications. 

In  inspection  work  all  specifications  must  be  so  worded  that 
there  can  be  no  difference  between  the  letter  and  the  spirit  of 
the  law.  This  means  that  drawings  and  bills  of  material  must 
specify  very  carefully  the  degree  of  accuracy  required  so  far  as 
relates  to  dimensions  which  require  special  care,  and  also  that  a 
general  written  code  of  requirements  be  prepared  by  agreement 
between  the  engineering  department,  the  shops,  and  the  inspec- 
tion department,  and  all  parties  involved  co-operate  to  live  up  to 
the  letter  of  this  code. 

361.  Qualifications  of  Inspectors. — The  class  of  labor   em- 
ployed in  the  inspection  department  will  depend  altogether  on 
the  duties  of  the  individual  inspector. 

The  inspection  of  such  an  article  as  steel  balls,  made  in 
quantity,  may  be  satisfactorily  conducted  by  a  mere  apprentice. 

Dimensional  inspection  of  machined  pieces  will  require  a  man 
of  the  capacity  of  a  good  vise-hand  machinist. 

Electrical  inspection  of  parts  may  in  many  cases  be  done 
satisfactorily  by  an  apprentice  electrician.  On  the  other  hand, 
a  final  electrical  test  may  demand  the  services  of  a  technically 
educated  man.  In  a  large  shop  the  personnel  of  the  inspection 
and  testing  department  would  include  men  of  various  degrees  of 
experience  and  education. 

It  will  evidently  take  a  man  of  executive  ability  and  tact 
as  well  as  a  good  engineer  to  fill  the  position  of  chief  inspector. 
He  will  be  able  to  do  his  duty  most  satisfactorily  if  his  department 
is  responsible  only  to  the  works  manager,  and  neither  to  the 
shop  superintendent  nor  to  the  chief  engineer. 

362.  Errors  and  Defects. — As  an  example  of  how  to  take  care 
of  defective  workmanship  and  material  developing  in  course  of 

21 


322      FACTORY  ORGANIZATION  AND  ADMINISTRATION 

manufacture,  the  following  instructions  as  used  in  a  machinery 
manufacturing  establishment  will  serve: 

"Standing  orders  have  been  established  as  follows,  covering 


o 


V  
ERRORS    OR 

rtATF 

DEFECTS. 

PART  Nn 

Nn  pns  DFFFCTIVE 

MATFRIAI 

Order  NO.  on  which  Material  originated 

Time  lost  as  per  list  on  other  side  and  Material  lost,  (if  any)  to  be  charged  as 
follows;  time  taker  check  which. 

If  Omissions  involving  no  Extra  work, 

Regular  Order  as  above 

If  Shop  Error  involving  Extra  work, 

Standina  Order  No.  18 

If  Drafting  Dept.  Error  involving  Extra  work,  Standing  Order  No.  19   
If  Additions  or  Alterations  involving  Extra  work,  _  Standing  Order  No.  20   
If  Due  to  Defective  Material                                      Standina  Order  No.  21 

DFFFCTS  OR  FRRORS  |N  PFTAII 

DISPOSITION 

MATERIAL  TO  BF  RFPl  AHFD 

ORDER  TO  BE  CLOSED  WITH  SHORTAGE  AS 

(CheckWh.cn) 

INSPECTOR 

(OVER) 

FIG.  159. — Error  or  defect  tag.     (Front.)     Manila  tag  stock,  4  1/8  inches 
wide,  7  inches  high. 

defective  castings  or  material  oi  any  kind  which  is  defective,  also 
all  extra  work  on  account  of  errors  or  defects  : 

Standing  Order  No.  18. — All  labor  and  material  lost  on  ac- 
count of  defective  workmanship  in  shop. 


INSPECTION  METHODS  IN  MODERN  MACHINE  SHOPS  323 

Standing  Order  No.  19. — All  labor  and  material  lost  on  account 
of  errors  in  drawings  or  designs. 

Standing  Order  No.  20. — All  labor  and  material  lost  on  ac- 


v_^/ 

TIME  TAKER  TO   FILL  FOLLOWING  ONLY  IN  CASE  OF 
DEFECTIVE  OR  SPOILED   MATERIAL. 

Emp.      Tool          TIME                COST 
No.         No.       Mrs.    Min.        $            C 

Emp.     Tool          TIME                COST 
No.         No.       Mrs.     Min.        $           C 

ORDER  ON  WHICH  MATERIAL  ORIGINATED    {NOT^TO^E}   CREDITED 
WITH  THIS  AMOUNT. 

TIME   TAKER. 

RECEIVING    DEPT.  TO  FILL  OUT  FOLLOWING  IN 
CASES  OF  DEFECTIVE  MATERIAL: 

PATTPPN    No.                   ..                       WEIGHT 

TRANSPORTATION   EXPENSE 

RECVG  CLERK. 

WHEN   MATERIAL  DISPOSED  OF   AND  ANY 
NECESSARY     ENTRIES     MADE    IN    STORES 
RECORDS,  SEND  THIS  TAG  TO  COST  DEPT. 

FIG.  160.— Error  or  defect  tag.     (Back.)     (See  Fig.  159.) 

count  of  additions  or  alterations  due  to  changes  in  instructions 
from  purchaser,  or  improvements  in  design,  conceived  during 
building. 

Standing  Order  No.  21. — All  labor  and  material  lost  on  account 
of  defective  material  delivered  on  purchase  orders.     Proper  credit 


324      FACTORY  ORGANIZATION  AND  ADMINISTRATION 

to  be  made  to  this  order,  of  such  amounts  as  may  be  secured 
in  credits  from  companies  responsible  for  this  loss." 

"Errors  and  Defects"  tags  (Figs.  159  and  160)  are  to  be  used 
in  the  following  manner: 

Where  material  is  to  be  scrapped  or  returned,  this  point  to  be 
decided  by  chief  floor  inspector,  the  tag  will  be  used  in  the 
following  manner: 

If  ordered  scrapped  on  account  of  some  shop  error,  no  defect 
being  in  casting,  chief  floor  inspector  will  write  " scrap"  on  error 
tag,  and  will  have  department  time-taker  enter  time  on  back  of 
error  tag  in  place  provided  for  same.  He  then  sends  a  laborer 
to  the  receipt  window  of  the  storeroom  with  the  part  or  parts. 
The  storeroom  clerk  removes  the  tag  and  sends  same  to  stores 
record  clerk  at  the  same  time  that  he  sends  in  regular  production 


Week  1 

INSPECTOR'S  REPORT  SHEET. 

Ending-                                                                 ] 

190 

Shop  Order. 

Spoiled. 

Name  of  Part. 

Operation,  or 
Reason  for  Rejecting. 

—  —  ^-—  — 

_^^ 

FIG.  161. — Inspection   department   weekly   report.     White  paper,    8    1/2 
inches  wide,  11  inches  high,  ruled  in  red  and  blue. 

tags  covering  the  day's  receipts  of  finished  parts  from  the  shop, 
and  sends  the  rejected  material  to  the  proper  scrap  bin. 

In  case  of  defective  material,  the  above  procedure  is  followed, 
except  that  parts,  instead  of  going  to  stores  department,  are  sent 
to  receiving  department,  where  necessary  entries  are  made  in 
spaces  provided  for  same  on  back  of  tag,  and  proper  shipping  tag 
is  attached  for  return  of  material  to  party  furnishing  same,  the 
error  tag  being  then  removed  and  sent  to  stores  record  clerk. 

Errors  not  involving  scrapping  or  returning  of  material  are 
handled  as  follows: 

Floor  inspector  will  decide  to  which  standing  order  extra  time 
is  to  be  charged,  time-takers  making  such  entries  on  current 
time  records.  In  all  cases  where  it  is  a  matter  of  putting  into 
acceptable  condition  parts  which  can  be  put  in  such  condition, 
the  time  to  be  charged  to  the  standing  order  will  be  only  that 


INSPECTION  METHODS  IN  MODERN  MACHINE  SHOPS  325 


required  to  make  the  part  acceptable.  If  extra  work  by  reason 
of  errors  or  defects  is  not  discovered  until  extra  time  beyond 
what  it  should  have  taken  has  already  been  posted  to  a  productive 


MOTOR  TESTING  RECORD. 

Motor  Class  HP_ 
Machine  No  Am 
Starting  Box  or  Contrail 

Shunt  Series  Comp._ 
tature  No.  Spei 

er  No                               Type. 

Standard  Special  Volts  Amp.  
rf 

Rptiifnnrp 

ARMATURE                         ||                    FIELD 

SHUNT               SERIES 

REMARKS 

No.  Sections                                   UVb.  Coils 

No.  Coils                                          Twrws  per  Coil 

Turns  per  Coil                                Gauge  Wire 

Gauge  Wire                                     Wires  Multiple 

Wires  Multiple                            VI  Weight  of  Coil 

Layers       Wide     Deep         C.C.  ofCoiKinsulated 

No.  of  Com.  Bars                          .Res.  per  Coil 

Resistance                                     \\Total  Resistance 

COLD  TEST. 

Time  1    Amp. 

Volts 

Speed 

i 

r:ik.- 

Brake 

E.H.P. 

M.H.P. 

Eft. 

REMARKS 

No  load  normal  voltage 

Full  load  normal  voltage 

RUNNING  TEST 

•» 

5 

d 

| 

j» 

HOT  TEST 

g 

No  load  normal  voltage 

K) 

Full  load  normal  voltage 

Armnhire  Riirfwe-                End  Connt 

ictiom 
.<j 



;rzea  Cot 
rmature 

JDot 

I  He 

emulator.  —  ,  Field 

Co4l» 

Resistance  of  Shunt  Coil 

fTnf 

A 

Field 

^nils 

7 

ested  I 

Vote 

4ppro 

vp.rt. 

ORDER   No. 

RECC 

RD  N 

a. 

FIG.  162. — Form  for  reporting  motor  test.     White  bond  paper,   8   1/2 
inches  wide,  11  inches  high,  ruled  in  red  and  blue. 

order,  the  production  order  will  be  credited  with  the  amount, 
which  is  to  be  posted  to  the  standing  order.  Provision  for  this  is 
made  on  the  back  of  the  form. 


326      FACTORY  ORGANIZATION  AND  ADMINISTRATION 


GASOLINE     CAR    INSPECTION 


Order  No .  Date 

No.  of  Car Engine  case  filled  clean  oil . 

Model - Spark  plugs  good 

No.  of  Engine ; . Oil  caps  on 


Size  of  Engine Wheels  true,  spokes  tight_ 

Size  of  wheels. Grease  cups  on 


Make  of  tire  . Front  wheels  set  properly. 

Size  of  tires Tires  pumped  up 

Size  of  front  springs Finish  good 

Size  of  rear  springs Trimming  good 

Size  of  inner  rear  axle_ Cotter  pins  in  bolts 

Size  of  rear  beariags '. Oil  in  axle  gear  case _ 

Size  of  front  inner  bearings Hood  right 

Size  of  front  outer  bearings Tool  box 


Make  of  spark  plugs '. Oil  in  transmission  case  and  bearings. 

Radiator . Shafts  and  wheels  oiled 

Oiling  system Parts  plated  and  polished 

Steering  wheel Canopy  top  irons  on 

Lamps Fan  pulleys  and  belt  right 

Generator . Storm  apron  buttons  on  body    

Horn All  felt  washers  in 

Batteries  and  box Dynamo  _ 


Odometer  Reading No.  Storage  Battery Charged. 

Inner  rear  axles  fit  properly All  adjustments  good 

Swivel  joint  properly  adjusted Springs  "gh» 

Cones  in  perfect  condition 


INSPECTED  BY 

Engine  runs  properly Steering  right 

Gears  shift  properly Wiring  right 

Commutator  set  properly Piping  good 

Carburetor  set  properly Clutch  spring  right 

Gears  perfect Clutch  adjustment  right  - 

Levers  right Throttle  lever  right 

Hub  brakes  right Pump  right. 

Auxiliary  brake  right Spark  levers  right 

Ballbearings  adjusted  perfectly All  adjustments  perfect. 

TESTED  BY 

Shipped  to  

Date  shipped. 100 


STUB:- 

Order  No.  . Water  and  gasoline  drained 

Car  No Ready  for  shipment A.M.. 

Signed. 


(Tear  off  this  stub  and  hand  to  shipping  department.) 


FIG.  163. — Form  for  combined  inspection  and  test  of  gasoline-driven  auto- 
mobile.    Buff  bond  paper,  8  1/2  inches  wide,  11  inches  high. 


INSPECTION  METHODS  IN  MODERN  MACHINE  SHOPS  327 

It  is  exceedingly  important  that  whenever  it  is  determined  that 
time  or  material  are  to  be  charged  to  these  standing  orders,  the 
corresponding  error  tags  be  written  out  immediately  by  floor 
inspector  and  the  goods  with  the  tag  sent  promptly  to  the  depart- 


o 


ORDER  No. 

No 

Name 

Volts             Amp. 

Rps. 

)         TE* 

As  per  Record  No. 
Sianed 

5TED 

WIVJIIV/M 

Approved 

rr 

One  of  these  Tags  must  be  attached  to  ev 

ery  piece  of  Apparatus  leaving  the  Factory 

FIG.  164. — Test  tag  attached  to  finished  product  by  testing  department. 
Red  tag  stock,  4  3/4  inches  wide,  2  1/2  inches  high. 

ment  that  should  receive  same.  Every  department  receiving 
goods  with  error  tags  should  do  everything  possible  to  hasten  the 
arrival  of  the  material  at  its  proper  destination,  and  of  the  tag 
at  its  final  destination,  namely,  the  cost  department. 

Whenever  parts  are  returned  to  shop  for  further  work  from 


© 

ORDER  No. 
Name 

No. 

Volts 

Amp.                  Res. 

'  Cause 

DEFECTIVE 

Signed 

FIG.  165. — Defective  tag  attached  to  finished  product  by  testing  depart- 
ment.    Blue  tag  stock,  4  3/4  inches  wide,  2  1/2  inches  high. 

general  inspection  department  at  storeroom  receiving  gate  to 
the  shop,  inspection  department  attaches  an  error  tag,  properly 
filled  out.  When  inspector  has  a  number  of  pieces  in  one  lot,  of 
which  part  are  defective  and  have  to  go  back  to  the  shop,  and 


328      FACTORY  ORGANIZATION  AND  ADMINISTRATION 

part  are  good,  he  sends  the  good  portion  with  the  regular  shop 
production  tag  to  storeroom,  noting  on  the  shop  tag  the  number 
which  he  has  returned  to  the  shop.  In  such  cases  the  error  tag 
takes  the  place  of  the  regular  production  tag  on  the  pieces  having 
extra  work  done  on  them  in  the  shop. 

Inspectors  should  keep  a  record  of  all  errors  and  defects,  and 
these  records  of  all  inspectors  should  be  assembled  into  a  weekly 
report  sheet,  similar  to  Fig.  161. 

363.  Testing  Distinct  from  Inspection. — Testing  of  assembled 
machines  is  usually  carried  on  by  a  department  distinct  from  the 
inspection  department,  the  testing  being  usually  under  the  super- 
vision of  the  chief  engineer  or  the  engineering  department. 

364.  Test  Reports  and  Records. — Fig.  162  shows  a  form  for 
reporting  motor  test.     Fig.  163  shows  a  form  for  combined  inspec- 
tion and  test  record  of  a  gasoline -driven  automobile. 

Figs.  164  and  165  are  "Tested,"  and  "Defective"  tags  as  used 
by  testing  department  employees  in  electrical  work. 

365.  The  Inspection  Function  Outside  of  the  Manufacturing 
Department. — The  inspection  function  can  be  developed  in  such 
departments  as  the  general  office,  the  sales  department,  or  the 
personnel  department,  by  assigning  to  an  inspecting  supervisor 
the  duty  of  checking  up  the  accomplishments  as  carried  out  on 
various  assignments  and  also  in  regard  to  routine  work.     The 
inspection  supervisor  would  be  required  to  make  reports  on  the 
execution  of  assignments  and  also  periodic  reports  on  the  accom- 
plishments of  various  divisions. 

REFERENCE 

PARKHURST:  "Applied  Methods  of  Scientific  Management,"  Chapter  III. 


CHAPTER  XXV 
RATE  FIXING  AND  TIME  STUDIES 

366.  Real  and  Wrong  Time  Study. — Real  time  study  consists 
of  determining  the  basic  elementary  unit  times  in  each  major 
process  in  each  industry,  checking  these  up  by  repeated  tests  and 
determining  the  variations  that  may  be  expected  under  varying 
pieces  or  parts.     Real  time  study  enables  us  to  accumulate  data 
which  give  us  the  power  to  predict  the  time  required  to  make  any 
piece.     The  accumulation  of  times  on  individual  pieces  gives 
us  no  such  available  data  or  power. 

367.  Former  Time  Standards  not  a  Reliable  Basis  for  Rate 
Fixing. — The  simplest  method  of  rate-fixing  which  is  apt  to  sug- 
gest itself  to  the  novice,  and  especially  to  a  man  whose  duties  have 
been  clerical  rather  than  mechanical,  is  to  average  past  time 
records  as  listed  in  the  cost  record,  as  a  basis  for  time  standards. 
This  method  is  perhaps  safe  in  estimating  selling  prices,  but  is 
seldom  safe  to  use  as  a  basis  for  piece-work,  premium,  bonus,  or 
efficiency  wage  systems.     The  reason  for  the  foregoing  statement 
is  that  accurate  time  and  motion  study  almost  invariably  reveals 
useless  motions  and  suggests  improvements  which  will  lead  to 
determining  the  best  method,  which  usually  involves  far  less  time 
than  former  methods. 

368.  Analysis  of  Work  into  Preparatory  and  Supplementary 
Steps  and  Active  Work. — The  correct  basis  for  time  standards 
is  the  least  possible  time  required  to  do  the  operations  involved 
and  turn  out  a  product  that  will  pass  the  inspecting  department  as 
satisfactory,  allowing  such  frequency  and  length  of  rest  periods 
as  will  prevent  fatigue0     In  the  machine  shop  this  time  is  made 
up  of  two   parts:  first,  that  spent  in  preparatory  and  supple- 
mentary work,  such    as  jigging,  chucking,  taking  out,  gaging, 
etc.;  second,  that  spent  in  active  work  while  the  machine  is  in 
operation. 

The  time  that  should  be  spent  in  active  machine  work  is  a 
matter  that  can  easily  be  determined.  In  machine  tool  work 
where  one  workman  operates  a  single  spindle  it  will  be  limited 
only  by  the  highest  speed  that  the  tools  and  machinery  will  stand. 

329 


330      FACTORY  ORGANIZATION  AND  ADMINISTRATION 

In  multiple  spindle  work  there  is  no  advantage  in  the  cutting 
operation  being  done  more  rapidly  than  the  shortest  time  that 
will  permit  of  continuous  active  work  on  the  part  of  both  operator 
and  machine.  The  handling  time  is  less  easily  determined  than 
machine  time  as  it  involves  motion  study  together  with  assign- 
ment of  proper  rest  intervals,  where  such  are  needed. 

369.  Rate  Fixing  on  Non-repetitive  or  "Job"  Work.— It  is 
evident   that   in   a   purely   manufacturing   establishment   the 
variable  factors  involved  in  the  handling  steps  can  be  determined 
with  a  far  greater  amount  of  certainty  than  in  jobbing  work, 
since  in  the  former  case  the  operation  is  being  done  on  the  same 
piece  in  the  same  manner  day  after  day.     A  jobbing  shop  may, 
with  advantage,  go  so  far  as  to  prepare  a  routing  tag  for  every 
piece,  and  specify  the  maximum  feed  and  speed  attainable  in 
machining,  and  also  the  minimum  time  that  it  is  estimated  should 
be  taken  in  the  chucking,  handling,  etc.     But  in  the  jobbing 
stop  the  average  workman  is  not  expected  to  accomplish  the 
work  in  the  minimum  time  thus  set,  since  he  does  not  repeat  the 
work  often  enough  to  get  into  a  fast  gait.     Hence  the  premium 
wage  system  with  its  fixed  day  rate  is  gaining  in  favor  in  jobbing 
shops.     In  fact,  there  are  instances  of  the  premium  system  being 
combined  successfully  with  a  bonus  of  a  fixed  daily  amount  for 
the  accomplishment  of  all  tasks  undertaken  and  completed  in  a 
specific  time.     In  fixing  the  time  it  should  take  a  man  working 
continuously  on  the  same  operation  to  accomplish  his  work,  it  is 
only  fair  to  expect  him  to  turn  out  the  work  far  more  rapidly  than 
would  be  expected  in  a  jobbing  shop.     Most  modern  machine- 
shop  work  is  so  much  relieved  of  heavy  labor  that  lively  move- 
ment on  the  part  of  the  worker  is  no  hardship.      Where  the 
work  is  heavy,  time  allowances  will  have  to  be  made  for  pauses 
and  intervals  of  rest. 

Rate-fixing  intelligently  undertaken  will  make  the  rate  right 
at  the  outset  and  hence  there  will  never  be  any  thought  of  chang- 
ing it.  Piece  rates  can  be  made  correct  at  the  outset  if  the  work 
of  rate-fixing  is  correctly  done,  and  based  upon  scientific  re- 
search rather  than  upon  the  guessing  which  is  often  misnamed 
"judging." 

370.  Foreman's    Time    Standards  Usually  Guess  Work.— 
The  usual  method  of  fixing  piece  rates  has  been  for  the  foremen 
to  decide  what  the  rates  should  be.     In  many  cases  it  is  quite 
customary  for  a  foreman  to  have  his  time-keeper  jot  down  the 


RATE  FIXING  AND  TIME  STUDIES  331 

names  or  symbols  of  pieces  on  which  work  is  being  done,  and  on 
which  no  piece  rates  have  been  set.  These  memoranda  are 
allowed  to  accumulate  until  a  few  hours  before  it  is  necessary  to 
advise  the  pay-roll  department  of  new  piece  rates,  with  the  re- 
sult that  the  work  of  rate-fixing  is  done  very  hastily.  The 
foundations  on  which  foremen  are  generally  accustomed  to 
base  piece  rates  are  previous  prices  paid  for  similar  pieces  and 
what  foremen  choose  to  call  their  " judgment."  Notes  based 
on  actual  observations  of  the  work  are  seldom  taken,  and  very 
rarely  are  observations  recorded  on  the  distinct  elements  or 
s^eps  in  operations. 

The  general  tendencies  and  attitudes  of  one  foreman  will  be 
very  different  from  those  of  another.  The  natural  result  is  that 
similar  work  is  differently  compensated  in  different  departments 
of  a  factory  where  the  foremen  are  wholly  responsible  for  piece- 
work rates. 

I  do  not  believe  it  at  all  wise  to  attempt  to  take  away  from 
foremen  certain  rights  with  regard  to  the  establishment  of 
piece  rates.  On  the  one  hand,  the  foreman  has  no  right  to  con- 
sider himself  the  supreme  authority  in  his  department.  The 
owners  of  a  business  certainly  have  rights  in  the  important  ques- 
tion of  wages.  On  the  other  hand,  the  foreman  feels  that  he  is 
responsible  for  the  output  of  his  department,  and  it  is  not  only 
fair  but  absolutely  essential  that  his  concurrence  be  secured  at 
every  step  taken.  The  ability  to  secure  such  concurrence,  and 
the  good-will  of  foremen  in  general,  is  an  indispensable  qualifica- 
tion of  the  man  who  is  to  take  charge  of  a  rate-fixing  bureau. 

371.  Analysis  of  Machine  Speeds  and  Feeds  to  be  Undertaken 
Prior  to  Rate  Fixing. — A  careful  investigation  of  speeds  of  all 
machine  tools  is  a  prerequisite  to  the  institution  of  a  rate-fixing 
bureau.  This  investigation  will  consist  in  recording  the  speeds  of 
line  shafts,  countershafts,  and  all  spindles,  together  with  all  steps 
of  cone  pulleys,  and  all  variations  in  speed  to  be  obtained  by 
change  gears  or  any  other  device.  A  card  record  should  be  .estab- 
lished, indexed  by  departments,  and  cross-indexed  to  show  all 
like  tools,  the  individual  cards  bearing  numbers  coincident  with 
the  serial  permanent  inventory  number  attached  to  each  machine 
tool.  On  these  cards  will  be  recorded  the  make,  style,  and  age  of 
the  machine,  together  with  the  speed  data  above  referred  to.  The 
proper  pulley  or  gear  combination  for  various  diameters  of  stock  at 
various  cutting  speeds  can  also  be  tabulated  on  these  record  cards. 


332      FACTORY  ORGANIZATION  AND  ADMINISTRATION 

The  preparation  of  the  speed  record  will  take  considerable 
time,  probably  some  months.  During  this  time  the  workmen 
will  have  become  accustomed  to  the  unconcealed  use  of  the  stop- 
watch by  one  or  more  observers.  The  extreme  delicacy  with 
which  the  stop-watch  question  is  here  treated  may  be  surprising 
to  some  readers.  However,  in  centers  of  constant  labor  agita- 
tions every  possible  agency  that  may  be  the  spark  to  ignite  the 
strike-fire  is  necessarily  dealt  with  cautiously. 

After  several  months'  use  of  the  stop-watch  in  the  collection 
of  data  necessary  for  the  speed  record,  it  is  not  likely  that  any 
trouble  will  be  created  by  the  use  of  the  watch  in  recording  the 
time  required  in  the  various  handling  operations. 

The  preliminary  work  in  connection  with  the  preparation  of 
the  speed  and  machine  record  may  advantageously  be  accom- 
panied by  an  investigation  of  the  merits  of  various  makes  of 
tool  steel  as  adapted  to  the  special  work  in  hand. 

To  one  who  is  not  familiar  with  the  possibilities  of  machine 
tools  when  correctly  operated  it  is  recommended  that  he  read 
A.  S.  M.  E.,  paper  No.  1010,  Vol.  XXV,  by  Carl  G.  Earth  on  "  Slide 
Rules  for  the  Machine  Shop,"  and  also  A.  S.  M.  E.,  paper  No. 
1119,  Vol.  XXVIII,  by  F.  W.  Taylor  on  "The  Art  of  Cutting 
Metals." 

While  Earth's  slide  rules  are  instruments  which  usually 
require  the  personal  attention  of  the  inventor  to  introduce 
successfully,  a  careful  study  of  Mr.  Earth's  paper  as  well  as  Mr. 
Taylor's  monumental  treatise  above  referred  to  will  disclose  to  a 
painstaking,  educated  and  skilful  machine-shop  manager  all 
the  data  that  are  required  to  predetermine  for  any  piece  requir- 
ing metal  removal,  the  "one  best  way"  of  doing  it,  together 
with  the  means  for  determining  the  time  required  to  do  the  work 
in  that  way. 

372.  Instruments  and  Devices  Needed  for  Time  Study. — In 
taking  observational  data  which  are  to  be  used  as  a  basis  for 
piece  .rates,  certain  simple  tools  and  instruments  are  indis- 
pensable, namely,  surface  speed  indicator,  revolution  counter, 
calipers,  scales,  and,  unfortunately,  the  stop-watch.  Various 
expedients  have  been  tried  and  suggested  for  the  concealing  of 
the  stop-watch,  but  I  have  yet  to  learn  of  any  such  ruse  which 
will  not  be  discovered  and  word  of  it  spread  all  over  a  shop  in  a 
very  limited  time. 

Within  recent  years  Frank  Gilbreth  has  made  use  of  the  motion 


RATE  FIXING  AND  TIME  STUDIES  333 

picture  camera  to  analyze  motions.  In  range  of  the  camera  he 
sets  up  a  large  clock  mechanism  with  a  pointer  revolving  once  a 
minute,  the  circle  being  divided  into  hundredths  or  even  thou- 
sandths. The  time  is  of  course  recorded  on  the  films  by  the 
photograph  of  this  large  stop-clock.  The  films  are  afterward 
carefully  analyzed  for  the  purpose  of  determining  the  best  methods 
and  eliminating  wrong  ones.  This  method  Mr.  Gilbreth  has 
designated  as  micro-motion  study. 

373.  Idle  Time  of  Machines. — Any  one  who  has  been  engaged 
for  some  time  in  shop-time  study  work  will  soon  discover  that  the 
largest  losses  are  as  a  rule  not  due  nearly  as  much  to  running 
machines  too  slowly  as  to  absolute  stoppage  of  the  machine  while 
the  operator  is  away.  It  would  be  unfair  to  say  that  the  operator 
is  killing  time;  certainly  the  machine  is.  Mr.  George  F.  Card  has 
devised  a  machine  for  recording  the  working  and  stopping  time  of 
machine  tools,  so  that  all  running  time  of  the  machine  is  shown 
on  a  dial  by  a  mark.  When  the  machine  is  at  rest  a  space  appears. 
This  machine  will  tell  the  exact  time  when  tools  are  started  and 
stopped.  It  does  this  by  means  of  a  contact  piece  on  the  belt 
shifter  or  elsewhere  on  the  machine  tool,  so  that  an  electro- 
magnet operating  a  pen  holds  the  pen  against  the  paper  when  the 
tool  is  running,  and  when  the  tool  is  at  rest  the  pen  is  held  away. 
The  paper  dial  on  which  the  pen  makes  its  record  is  operated  by 
clockwork.  A  separate  clock  located  directly  above  the  one 
which  operates  the  dial  is  stopped  whenever  the  pen  is  lifted, 
and  it  is  started  as  soon  as  the  pen  comes  into  contact  with  the 
paper.  This  clock  then,  which  is  set  at  12  as  the  starting  time, 
records  the  total  running  hours  and  minutes  of  the  machine  in  a 
day. 

A  number  of  machines  may  be  wired  up  to  a  board  containing 
snap-switches,  the  snap-switches  being  so  arranged  that  each 
circuit  leading  to  them  may  be  thrown  on  or  off  of  the  clock 
recorder.  In  this  way  observations  may  be  taken  for  a  day  on 
any  one  of  a  group  of  machines  without  the  men  in  the  shop 
knowing  which  one  of  the  machines  is  being  recorded.  Of  course, 
the  record  does  not  show  when  the  machine  is  " cutting  wind," 
that  is,  when  the  machine  is  moving  but  not  cutting  metal. 

When  observational  data  are  being  taken  attention  must  be 
given  to  this  last  possibility.  Such  a  device  will  not,  by  any 
manners  of  means,  take  the  place  of  observational  time  study, 
but  it  may  be  made  a  supplement  to  it  by  recording  the  time 


334      FACTORY  ORGANIZATION  AND  ADMINISTRATION 

between  stops  taken  by  the  machine  operator  when  he  is  not  being 
observed;  also  the  length  of  the  stops. 

374.  Taylor's  Description  of  Correct  Time  Study.— Taylor 
classifies  time  study  into  two  broad  divisions:  first,  analytical 
work;  second,  constructive  work. 

The  analytical  work  of  time  study  is  as  follows: 

a.  Divide  the  work  of  a  man  performing  any  job  into  simple  elemen- 
tary movements. 

b.  Pick  out  all  useless  movements  and  discard  them. 

c.  Study,  one  after  another,  just  how  each  of  several  skilled  workmen 
makes  each  elementary  movement,  and  with  the  aid  of  a  stop-watch 
select  the  quickest  and  best  method  of  making  each  elementary  move- 
ment known  in  the  trade. 

d.  Describe,  record  and  index  each  elementary  movement,  with  its 
proper  time,  so  that  it  can  be  quickly  found. 

e.  Study  and  record  the  percentage  which  must  be  added  to  the 
actual  working  time  of  a  good  workman  to  cover  unavoidable  delays, 
interruptions,  and  minor  accidents,  etc. 

f.  Study'and  record  the  percentage  which  must  be  added  to  cover  the 
newness  of  a  good  workman  to  a  job,  the  first  few  times  that  he  does  it. 
(This  percentage  is  quite  large  on  jobs  made  up  of  a  large  number  of 
different  elements  composing  a  long  sequence  infrequently  repeated. 
This  factor  grows  smaller,  however,  as  the  work  consists  of  a  smaller 
number  of  different  elements  in  a  sequence  that  is  more  frequently 
repeated.) 

g.  Study  and  record  the  percentage  of  time  that  must  be  allowed  for 
rest,  and  the  intervals  at  which  the  rest  must  be  taken,  in  order  to  offset 
physical  fatigue. 

The  constructive  work  of  time  study  is  as  follows: 

h.  Add  together  into  various  groups  such  combinations  of  elementary 
movements  as  are  frequently  used  in  the  same  sequence  in  the  trade, 
and  record  and  index  these  groups  so  that  they  can  be  readily  found. 

i.  From  these  several  records,  it  is  comparatively  easy  to  select  the 
proper  series  of  motions  which  should  be  used  by  a  workman  in  making 
any  particular  article,  and  by  summing  the  times  of  these  movements, 
and  adding  proper  percentage  allowances,  to  find  the  proper  time  for 
doing  almost  any  class  of  work. 

j.  The  analysis  of  a  piece  of  work  into  its  elements  almost  always 
reveals  the  fact  that  many  of  the  conditions  surrounding  and  accompany- 
ing the  work  are  defective;  for  instance,  that  improper  tools  are  used, 
that  the  machines  used  in  connection  with  it  need  perfecting,  and  that 
the  sanitary  conditions  are  bad,  etc.  And  knowledge  so  obtained  leads 
frequently  to  constructive  work  of  a  high  order,  to  the  standardization 
of  tools  and  conditions,  to  the  invention  of  superior  method  and 
machines. 


RATE  FIXING  AND  TIME  STUDIES  335 

375.  Confining  Rates  to  New  Operations  and  New  Pieces.— 

After  completion  of  the  preliminary  work,  the  real  work  of 
rate  fixing  may  begin  by  taking  observations  and  establishing 
rates  on  all  new  pieces,  with  the  foremen's  co-operation,  at  the 
same  time  beginning  observations  on  some  single  machine,  taking 
piece  by  piece  and  operation  by  operation. 

If  a  prior  time-standard  or  rate  is  of  such  a  nature  that  it  allows 
too  long  a  time  or  too  high  a  pay,  it  must  not  under  any  circum- 
stances be  changed.  The  only  way  to  get  rid  of  such  an  error  is 
to  redesign  the  piece  or  change  the  process.  Even  this  recourse  is 
to  be  avoided  if  at  all  possible. 

376.  Form   for   taking   Observations   for  Time  Studies. — A 
form  used  by  the  writer  for  an  observation  memorandum  is  shown 
in  Fig.  166.     In  many  cases  not  all  of  the  data  called  for  will  be 
obtainable  or  necessary.     Individual  tastes  will  determine  the 
exact  size  and  shape  of  such  a  form.     A  book  has  always  the  dis- 
advantage that  the  original  data  sheets  cannot  be  easily  classified 
and  filed  away,  as  is  the  case  with  a  loose-leaf  system.     Referring 
to  the  form,  the  items  calling  for  time  spent  in  grinding  tools, 
time  spent  in  adjusting  machine,  and  justifiable  time  per  day  not 
accounted  for,  will  constitute  difficult  observational  data.     They 
would  be  best  estimated  by  a  whole  day's  observation  on  some 
typical  piece  of  work  which  could  be  used  as  a  basis  to  cover 
a  group  of  similar  jobs.     In  an  establishment  where  special  tool- 
grinding  departments  are  maintained,  the  item  covering  time 
spent  in  grinding  tools  will,  of  course,  drop  out.     There  are  few 
factories  in  which  it  would  not  be  advantageous  to  maintain  a 
tool-grinding  and  storage  department.     The  claim  has  been  made 
that  each  man  likes  his  tool  ground  in  his  own  way,  and  becomes 
attached  to  some  particular  tool  which  he  might  not  get  back 
from  a  general  grinding  room.     These  points  are  offset  by  the 
fact  that  some  men  are  much  harder  on  tools  than  others,  and 
that  a  skilled  grinder  will  be  able  often  with  a  few  words  to  tell 
them  where  their  trouble  lies.     One  of  the  best  arranged  tool 
storage  and  grinding  rooms  the  writer  has  seen  is  provided  with 
standard  removable  bin  units,  two  wide  and  four  high,  each  bin 
containing    an    easily  removable    interchangeable    filler.     The 
numbered  spaces  containing  the  tools  are  plainly  visible.     This 
method  of  storing  tools  saves  a  great  deal  of  time  over  any  storage 
method  employing  drawers  or  boxes. 

In  securing  the  observational  data,  the  personality  of  the 


336      FACTORY  ORGANIZATION  AND  ADMINISTRATION 


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RATE  FIXING  AND  TIME  STUDIES 


337 


observers  is  a  matter  of  great  importance.  A  carefully  selected 
man  can  go  into  the  works  and  take  all  the  observations  neces- 
sary, and  at  the  same  time  have  the  good-will  and  friendship  of 
both  men  and  foremen.  Another  man  doing  exactly  the  same 
routine  work  might  easily,  and  unconsciously  to  himself,  be  con- 
sidered offensive  by  the  shop  hands.  The  qualifications  essential 
for  such  observers  are,  first,  a  sound  and  discriminating  judgment 
based  on  an  inherent  sense  of  justice;  second,  ability  to  take  and 
appreciate  the  value  of  precise  observations,  such  as  is  developed 
in  laboratory  training;  third,  an  unassumed  spirit  of  democracy 


AUTHORIZATIO 
OR.GINAL                                                                 NEW  °R  OHANGE°  RATES 

To  Rate  Fixing  Dept.                                             From  Dept. 

THE  FOLLOWING  CHANGES 

N  SHEET 
AND  OPERATIONS. 

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ARE  RECOMMENDED 

PIECE 
NUMBER 

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PRICE  PER 

100  PCS. 

NEW  OPERATIONS 

Enter  only  New  Operation* 
in  this  column 

IN  PLACE  OF 
If  New  Operation  replace.  Old 
Operation  Enter  Name  of 
Old  Operation  here 

OLD  OPERATIONS 
Enter  only  Old  Operation! 
on  which  rate  is  to  be  changed 

DISCONTINUED 
OPERATIONS 

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f-w. 

uw. 

.  

_      -     ^=^ 
—  —  —  —  —  — 

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' 

_ 
—  __—  ^—  — 

— 

—  * 

Remarks: 

Foreman 

Note:  Send  original  and  duplicate  to  RATE  FIXING  DEPT: 
Duplicate  must  be  receipted  and  returned. 

FIG.  167. — Sheet  for  changed  rates  and  operations.  The  sheet  is  71/4 
inches  wide  and  11  inches  high,  white  paper.  A  duplicate,  pale  buff  in  color, 
is  attached  directly  behind  the  original. 

and  modesty;  fourth,  ability  to  stand  one's  ground  without  creat- 
ing antagonism.  In  short,  character  and  tact  will  be  the  chief 
requisites. 

377.  Computations  and  Statistics  as  an  Aid  to  Observations. — 
In  addition  to  taking  observational  data,  a  rate-fixing  depart- 
ment should  prepare  such  statistical  data  and  charts  as  will  be 
valuable  in  predetermining  and  checking  time  standards.  After 
taking  such  field  notes  as  may  be  desirable,  the  observer  goes  to 
the  department  office  and  "works  up"  his  notes;  i.e.,  he  deter- 
mines on  what  he  considers  a  fair  time  standard  for  each  opera- 
22 


338      FACTORY  ORGANIZATION  AND  ADMINISTRATION 

tion  observed,  and  investigates  also  the  statistics  on  file,  using 
the  statistical  information  as  secondary  and  not  primary  refer- 
ence. After  he  has  thoroughly  worked  up  the  results  of  his 
study,  the  observer  visits  the  foremen  of  the  departments  in 
which  he  took  observations,  with  a  view  to  co-operating  with 
the  foremen  in  establishing  new  standards. 

378.  Notice    of   New   Rates. — The    foreman's    interest    and 
co-operation  is  always  essential.     Hence  the  authorization  sheet 
should  be  signed  by  the  foreman,  and  its  arrival  in  the  office  of 
the  rate-fixing  department  should  be  evidence  that  the  rates  have 
been  sanctioned  by  both  foreman  and  observer.     A  form  sug- 
gested for  this  authorization  sheet  is  shown  in  Fig.  167. 

A  card  index  of  all  piece  rates  is  kept  in  the  rate-fixing  de- 
partment office  by  postings  from  the  observation  and  authoriza- 
tion sheets.  The  general  form  and  arrangement  of  this  card 
index  will  depend  upon  the  nature  of  the  business  and  product. 

The  regular  routine  of  the  work  of  the  department  would 
consist  of  a  methodical  review  of  all  existing  rates,  accom- 
panied by  a  continuous  system  of  notices  of  all  new  work  under- 
taken. Notices  are  sent  by  the  head  time  clerk  to  the  rate-fix- 
ing department  of  any  new  pieces  on  which  work  is  begun,  and 
on  which  new  rates  are  desired,  and  an  observer  from  the  rate- 
fixing  department  responds  at  once  to  this  call. 

379.  Time  Study  and  Rate  Fixing  to  be  Permanent  Rather  than 
Temporary. — A  regular  routine  system  as  above  laid  out  will  be 
far  preferable  to  an  occasional  and  more  or  less  disconnected 
series  of  observations  used  merely  as  a  stimulus  to  greater  accu- 
racy on  the  part  of  foremen.     There  is  danger  of  the  foremen 
regarding  the  work  as  less  authoritative,  and  considering  that  it 
is  being  done  in  a  half-hearted  way,  unless  it  has  the  impetus  and 
swing  of  a  regular  routine  system. 

The  number  of  men  to  be  employed  in  instituting  a  work  of 
this  kind  will  depend  wholly  upon  the  number  of  pieces  to  be 
investigated,  and  their  similarity.  The  qualifications  of  the  men 
are  such  that  they  are  likely  to  be  as  high  salaried  as  the  best 
foreman.  While  the  employment  of  additional  so-called  non- 
productive labor  is  not  in  line  with  any  policy  of  retrenchment, 
it  is  evident  that  present  conditions  in  many  large  factories  are 
such  that  the  right  kind  of  men  working  on  time  standards 
and  rate  fixing  could  save  their  salaries  many  times  in  a  year. 


RATE  FIXING  AND  TIME  STUDIES 


339 


380.  Abridged  Time  Studies  for  Transient  Work. — The  form 
presented  in  the  preceding  discussion  for  recording  observational 
data  (Fig.  168)  presumes  that  a  great  many  pieces  will  be  made 
identical  with  the  one  upon  which  the  observation  data  are  taken. 
Herein  lies  the  only  justification  for  going  into  such  minute  detail 
It  is  frequently  desirable  to  secure  time-study  data  for  the  pur- 
pose of  establishing  premium  or  bonus  times  where  the  num- 
ber of  pieces  of  one  kind  is  not  large  enough  to  justify  the  ex- 
pense of  going  into  such  minute  detail.  Under  these  circum- 


NAME  OF  PART 

TIME  STUDY  DATA 
MARK  NO. 

MATERIAL 

DRAWING  NO. 

OPERATION 

MACHINE  NO. 

FEED,    SPEED   OR   OTHER                     \ 
CONDITIONS   AFFECTING   WORK  t 

STEPS 
1 

IN  OPERATION  AS  FOLLOWS 

TIME  OBSERVATIONS 

CONTI. 

TIME 

INDI. 
TIME 

CONTI. 
TIME 

INDI. 
TIME 

AVERAGE 
TIME 

2 

3 

4 

5 

. 

ORDER  NO. 

NO.  PIECES 

COST  DEPT.  RECORD  ON  ABOVE  OPERATION 
TIME  FOR  THIS  OPERATION 

Machine 
No. 

Employe 

Mo. 

Date  Work 
Done 

FIG.  168. — Short  form  for  time-study  data.     Yellow  bond  paper,  6  inches 
wide,  4  inches  high. 

stances  an  abridgment,  which  need  be  none  the  less  accurate, 
is  suggested  in  Fig.  168.  Whenever  the  time  study  is  to  be  the 
basis  of  an  instruction  card,  however,  the  motion  analysis  should 
be  worked  out  in  complete  detail. 

381.  Overcoming  Objections  to  Time  Study. — Among  those 
who  are  inclined  to  criticize  the  taking  and  use  of  time  study, 
one  of  the  most  prevalent  misconceptions  is  that  one  of  the 
paramount  aims  is  the  accelerating  of  muscular  movements  on 
the  part  of  the  worker.  As  a  matter  of  fact,  this  feature  is  the 
least  frequent,  and  least  profitable  of  all  improvements  resulting 
from  time  study. 


340    'FACTORY  ORGANIZATION  AND  ADMINISTRATION 

REFERENCES 

GILBRETH:  "Primer  of  Scientific  Management,"  Chapters  I  and  II. 
EARTH:  "Slide  Rules  for  the  Machine  Shop,"  A.  S.  M.  E.,  paper  No.  1010. 
TAYLOR:  "The  Art  of  Cutting  Metals,"  A.  S.  M.  E.,  paper  No.  1119. 
GILBRETH:  " Motion  Study." 

GANTT:  "Work,  Wages  and  Profit,"  Chapters  I  and  II. 
KNOEPELL:  "Installing  Efficiency  Methods,"  Chapter  XI. 
GILBRETH:  Psychology  of  Management,"  Chapter  IV. 
GANTT:  "A  Bonus  System  of  Rewarding  Labor,"  A.  S.  M.  E.  paper, 
928,  Vol.  XXIII. 


CHAPTER  XXVI 
WAGE  SYSTEMS 

382.  Wage  System  Must  be  Adapted  to  Conditions. — The 

object  of  this  discussion  is  to  present  briefly  the  various 
methods  of  remuneration  for  labor  that  are  currently  in  use.  It 
will  be  the  endeavor  to  demonstrate  to  what  conditions  each 
method  is  best  applicable,  and  to  suggest  for  each  method  an 
outline  for  a  system  of  management  and  statistics  which  will 
produce  the  highest  efficiency  in  each  method. 

Although  there  is  a  great  variety  of  methods  of  compensation, 
all  of  these  methods  may  be  grouped  clearly  under  three  heads, 
namely,  day  work,  piece  work,  and  gain-sharing  methods. 

383.  Fixed  Hourly  or  Day  Rate. — Remuneration  by  a  fixed 
daily  wage  assumes  that  there  is  a  current  market  rate  for  com- 
petent services  in  any  certain  craft.     The  day  rate  <p  re  vailing  in 
any  particular  establishment  will  be  governed  by  such  factors  as 
the  degree  of  expertness  in  craftsmanship  or  trade  necessary  for 
satisfactory  results  in  the  particular  industry;  secondly,  by  the 
geographical  location  of  the  establishment,  which  in  turn  will 
determine  the  allowable  manufacturing  cost  of  product  as  it  is 
influenced  by  cost  of  transportation  to  the  sales  market.     Shops 
whose  sales  market  does  not  cover  a  very  large  area  will  not  have 
a  very  heavy  transportational  or  selling  expense.     However,  this 
condition  usually  exists  only  in  areas  of  dense  population  where 
the  cost  of  living  is  high;  hence  the  wage  rate  is  higher  in  such 
shops  for  the  same  grade  of  work  in  any  particular  trade  than  is 
the  case  in  shops  located  away  from  the  centers  of  greatest  popu- 
lation density. 

There  are  many  classes  of  work  where  the  human  labor  element 
is  wholly  controlled  by  the  output  of  certain  machines,  the  opera- 
tor having  no  opportunity  for  initiative  in  making  his  services  of 
greater  value.  This  is  the  only  class  of  labor  in  which  day  work 
pure  and  simple  is  the  best,  and  in  fact  the  only  method  from  an 
economic  standpoint.  On  the  other  hand,  in  shops  small 
enough  that  the  manager  may  keep  in  close  touch  with  the  indi- 
vidual personnel,  which  means  shops  of  not  over  one  hundred 

342 


WAGE  SYSTEMS  343 

employees,  it  is  possible  to  attain  high  efficiency  under  a  day-rate 
system,  provided  the  wage  rate  is  high  and  careful  statistics  of 
labor  efficiency  are  kept.  In  still  smaller  shops,  say  of  forty  or 
fifty  men,  where  each  man  and  his  work  are  under  the  direct 
scrutiny  of  a  boss  or  foreman  thoroughly  familiar  with  a  high- 
grade  standard  of  quality  and  quantity  of  output,  good  results 
are  obtained  under  the  day-rate  system  even  without  the  keeping 
of  any  statistical  records  of  labor  efficiency.  It  should  ever  be 
borne  in  mind,  however,  and  considered,  that  there  is  constantly 
a  possibility  that,  if  an  inducement  is  offered,  men  will  make  some 
improvement  in  machinery  and  methods  of  work.  Many  shops 
having  a  complex  output  dependent  in  quality  and  quantity  upon 
individual  initiative  and  skill  adhere  to  day-rate  compensation. 
Some  shop-owners  claim  that  their  management  is  so  good  that 
they  know  intuitively  how  long  every  job  ought  to  take,  and  that 
simply  by  observation  they  can  tell  when  certain  men  are  not 
giving  them  a  fair  day's  work,  and  let  such  men  go.  Close  scru- 
tiny into  these  shops  will  inevitably  result  in  disclosing  conditions 
of  variable  efficiency.  A  wide-spread  impression  prevails  that  the 
day  wage  is  the  only  practicable  one  in  work  which  requires  great 
care,  which  cannot  be  hurried,  which  cannot  be  slighted.  This 
assumes  that  if  only  given  sufficient  time  to  do  work,  the  man 
doing  the  work  will  be  conscientious  enough  to  do  it  thoroughly, 
an  assumption  which  is  not  always  proven  to  be  correct  by 
actual  experience.  A  successful  daywork  as  well  as  a  successful 
piece  system  or  merit  system  must  be  prepared  with  careful 
reference  to  quality.  When  a  considerable  number  of  men  is 
employed  on  work  in  which  quality  or  accuracy  is  vital,  an  inspec- 
tion system  must  go  hand  in  hand  with  any  system  of  remunera- 
tion. Well-known  companies  who  had  at  first  some  difficulty 
with  merit  systems,  owing  to  slighting  of  work,  frankly  state  that 
since  proper  inspection  has  been  provided  for,  they  have  far  less 
trouble  on  account  of  quality  than  they  used  to  have  under  the 
day-wage  system,  since  the  men  know  that  they  dare  not  slight 
quality  if  they  hope  to  gain  the  benefits  of  the  merit  wage. 

The  principal  danger  with  the  day-rate  system  lies  in  the  tend- 
ency toward  establishing  a  dead  level  of  production  which  is 
low.  It  is  possible  to  remunerate  in  a  day-pay  system  the  best 
workingman  at  a  higher  hourly  rate  than  the  average.  However, 
times  are  bound  to  occur  when,  for  instance,  a  man  who  has  been 
promoted  on  account  of  exceptionally  good  services  to  a  rate  of, 


344     FACTORY  ORGANIZATION  AND  ADMINISTRATION 

say,  32  1/2  cents  an  hour  will  be  assigned  the  identical  work  which 
another  man  is  doing  who  may  be  receiving  but  25  or  27  1/2  cents 
an  hour.  This  occurrence  is  always  taken  advantage  of  by  the 
lower  priced  man,  who  asks  for  a  raise  in  wages,  and  it  is  pretty 
hard  to  keep  him  from  becoming  dissatisfied.  Day  pay  does  not 
furnish  the  stimulus  for  development  of  initiative  or  creative 
ability  which  is  presented  by  the  gain-sharing  methods. 

So  far  as  pay-roll  systems  are  concerned  in  connection  with 
the  day-rate  method,  the  only  thing  necessary  is  a  recording  time- 
clock.  Pay-roll  will  be  made  up  from  the  time-clock  strips  or 
cards. 

384.  Efficiency    Records    under    Day-rate. — In    order    to 
determine  workmen's  efficiency  as  craftsmen,  it  is  necessary  to 
have  some  system  whereby  comparative  records  are  made  of  time 
required  to  do  individual  operations.     Such  systems  are  abso- 
lutely essential  in  order  to  bring  a  day-rate  system  to  a  state  of 
higher  efficiency.     When  these  systems  are  once  installed  it 
requires  but  very  little  additional  labor  to  take  care  of  the  pay-roll 
and  statistics  of  a  gain-sharing  system,  which  will  always  be  more 
efficient  than  the  day  system,  excepting  as  before  stated,  where 
the  workman  is  a  mere  attendant  to  a  machine  and  has  no  oppor- 
tunity to  make  his  labor  more  valuable  than  a  certain  fixed 
amount.    The  comparative  time  record  will  involve  the  prepara- 
tion of  an  order  or  instruction  sheet  or  slip  or  tag  specifying  the 
distinct  operations  which  must  be  done.     For  the  sake  of  uniform- 
ity these  instructions  must  be  made  beforehand,  and  the  workman 
must  not  be  relied  upon  to  enter  them  himself,  as  various  working- 
men  will  call  the  same  operation  by  different  names,  and  will 
merge  certain  operations  which  should  be  separate  into  one,  or 
expand  one  operation  into  a  number.     In  addition  to  the  definite 
providing  for  routing  instructions,  provision  must  be  made  for 
keeping  time  on  the  individual  operations.     This  time-keeping 
should  not  be  done  by  the  workmen  or  foremen,  but  by  specially 
delegated  time-keepers,  with  or  without  the  use  of  machines 
designating  the  time  of  changing  job  or  the  total  time  elapsed. 

385.  Comparative  Time  Records.— To  build  up  a  comparative 
time  record,  the  time-postings  will  have  to  be  selected  and  posted 
on  to  cards  or  other  form  of  record,  representing  the  piece  worked 
on,  and  recording  the  times  required  for  the  same  operations 
by  different  men. 


WAGE  SYSTEMS 


345 


Figs.  169  and  170  are  front  and  back  respectively  of  an  example 
of  a  comparative  time  record. 

It  is  quite  apparent  that  with  the  accumulation  of  such  data 
covering  performances  under  a  day-work  system,  covering  a 
period  of  six  months  to  a  year,  we  have  good  statistical  data  to 
use  in  connection  with  time  and  motion  studies  to  aid  in  pro- 
ceeding to  the  installation  of  systems  resulting  in  greater  economy 
and  higher  financial  returns  to  both  employer  and  employee. 


COMPARATIVE  TIME  &  COST  RECORD 


TYPE  OF  MACHINE. 
DRAWING  NO. 


ATIONS  OR  "ROUTING" 


TIME         COST         COST 


TIME          COS1 


COMPARATIVE  TIME  &  COST  RECORD 


ORDER  NO.         MONTH  FIRST  SECOND  THIRD  FOURTH  FIFTH  SIXTH  TOTALS 


FIGS.  169  and  170. — (Fig.  169,  top  card) :  Comparative  time  and  cost  record, 
giving  the  order  and  time  of  each  operation  on  a  given  job.  White  card, 
6  inches  wide,  4  inches  high.  (Fig.  170,  bottom,  reverse  of  Fig.  169) :  The 
first  number  (above  the  diagonal)  is  the  workman's  check  number,  the  number 
below  the  diagonal  is  the  time.  White  card,  6  inches  wide,  4  inches  high. 

386.  Piece-rate  System. — The  second  class  of  remuneration, 
namely,  piece  rate,  will  always  be  found  most  satisfactory  where 
muscular  effort  predominates,  or  in  work  where  a  low  grade  of 
intellect  exists.  There  has  been  a  tendency  in  many  shops  to 
abuse  the  piece  rate  with  a  guaranteed  date  rate.  Under  these 
conditions  it  might  just  as  well  not  be  used  at  all,  because  its  very 
efficacy  lies  in  the  penalty  to  idlers  of  a  low  amount  of  day's  earn- 
ings for  a  poor  day's  work.  This  is  the  only  remedy  for  automat- 
ically taking  care  of  the  time-killer  and  inefficient  workman.  A 
man  with  a  low  grade  of  intellect  will,  if  he  has  a  guaranteed  day 
rate,  invariably  tend  to  a  very  low  productive  standard.  Piece 
rate  is  by  far  the  best  method  of  compensating  such  labor  as  the 
simpler  classes  of  molding  and  foundry  work,  shoveling  coal  or 


346     FACTORY  ORGANIZATION  AND  ADMINISTRATION 

dirt,  unloading  or  wheeling  pig  iron,  ore,  bricks,  etc.  In  work 
of  this  nature  there  is  no  danger  of  the  overhead  operating 
expense  being  unduly  increased  as  the  man's  productive  work 
increases.  Moreover,  the  man  is  responsible  by  the  exercise  of 
his  own  muscles  for  any  increase  in  his  output,  and  has  not'  to 
thank  any  machine  for  helping  him,  as  is  the  case  with  a  skilled 
machinist,  who  can  increase  his  output  by  the  exercise  of  a  little 
ingenuity. 

Any  successful  piece-work  system  will  always  provide  a  guar- 
antee to  the  workman  that  he  will  be  insured  against  loss  from 
causes  beyond  control.  This  is  easily  accomplished  by  the  trans- 
ferring of  the  worker  to  a  day  rate  when  circumstances  warrant 
it.  Such  transfer  should  always  be  recorded  by  a  transfer  ticket, 
stating  the  date  and  time  of  day  the  transfer  is  made,  together 
with  the  reason  for  the  transfer  to  day  rate.  These  tickets  are 
collected  by  the  time-keepers  and  turned  over  by  them  to  the 
pay-roll  department,  where  they  should  not  only  be  kept  on  file, 
but  should  be  noted  and  compared  by  some  person  of  authority, 
so  as  to  avoid  too  free  an  indulgence  in  the  transfer  to  day  rate. 

387.  Piece  Rates  Must  Not  be  Cut. — Piece  rates  must  be  care- 
fully and  correctly  fixed  at  the  outset  on  a  basis  of  time  and 
motion  studies  and  even  if  they  cause  high  earnings  must  not  be 
cut.     Cutting  piece  rates  inevitably  causes  disloyalty  and  hos- 
tility'of  employees. 

388.  Differential  Piece-rate  System. — It  is  eminently  fair  that 
the  laborer  should  be  paid  not  only  a  straight  piece  rate,  but  an 
increasing  piece  rate  as  his  output  increases.    This  method  of 
compensation  has  been  designated  as  the  differential  piece  rate, 
and  has  been  found  very  satisfactory.     As  an  example  of  its 
operation,  a  piece  rate  of  20  cents  may  be  fixed  on  a  certain  pro- 
duct, provided  the  day's  output  is  ten  or  less.    For  a  day's  output 
of  from  ten  to  fifteen  pieces,  the  rate  may  be  made  22  1/2  cents 
per  piece,  and  for  more  than  fifteen  pieces  the  rate  would  be  25 
cents  per  piece.     At  first  sight  it  would  appear  that  the  business 
owner  would  lose  money  by  paying  a  higher  rate  as  a  man's 
output  increases.     This  would  be  the  case  in  such  classes  of  work 
where    general  operating    expense    increases    with    increase    of 
output.     Where  the  mechanical  operating  expense  does  not  so 
increase,  it  must  be  remembered  that  as  a  man's  day's  product 
increases  he  reduces  the  ratio  between  the  general  overhead  of 
taxes,  insurance,  officers'  salaries,  etc.,  to  productive  labor  cost, 


WAGE  SYSTEMS 


347 


and  it  may  be  very  profitable  to  use  the  " differential"  piece 
rate  in  such  cases. 

389.  Records  of  Piece-rate  Earnings. — The  systems  required 
for  keeping  track  of  a  piece-work  pay-roll  will  involve  the  regis- 
tering by  means  of  a  time-clock,  and  a  record  of  pieces  of  work 
units  accomplished,  involving  statistical  methods  practically  the 
same  as  for  time-keeping  as  indicated  in  connection  with  day-work 
methods.  However,  it  will  not  be  necessary  to  keep  an  efficiency 
record  other  than  the  record  of  piece-rate  earnings  for  this  sort 
of  employees,  excepting  possibly  some  kind  of  character  record,  so 
as  to  avoid  the  attaining  of  a  foothold  by  an  undesirable  element. 


MOLDER'S  TIME  CARD 

DESCRIPTION  OF  WORK 

PATTERN 
NO. 

DAYS  AND  AMOUNTS 
Upper  Fig.  Total  pcs.  1  day 
Lower  Fig.  Total  to  date 

TOTAL 
PCS. 

RATE 
PER 
PIECE 

AMOUNT 

$ 

Cts. 

M 

I 

w 

TH 

F 

S 

DEPARTMENT  NO.            WEEK  ENDING                  NAME                                   TOTAL  NO. 

FIG.  171. — Record  of  molder's  piece  work,  totals  for  a  week, 
colored  card,  71/8  inches  wide,  5  inches  high. 


Salmon- 


Fig.  171  is  a  Molder's  Piece  Rate  Time-card,  covering  half  a 
month. 

390.  Gain-sharing  Methods,. — The  third  general  division  is 
that  of  gain-sharing  methods.  Gain-sharing,  it  must  be  borne  in 
mind,  is  distinct  from  a  system  of  dividing  indiscriminately 
among  all  employees  a  part  of  the  net  profits.  The  simplest 
gain-sharing  system  is  one  in  which  a  standard  of  output  is  estab- 
lished for  certain  departments,  and  an  amount  of  money  propor- 
tionate to  the  bettering  of  this  standard  by  any  one  department  is 
distributed  proportionally  to  each  man's  wages  among  all  employ- 
ees in  that  department.  This  method  is  applicable  to  certain 


348     FACTORY  ORGANIZATION  AND  ADMINISTRATION 

kinds  of  work  where  a  number  of  men  work  jointly  in  accomplish- 
ing a  given  result  and  where  it  is  difficult  to  draw  the  line  as  to 
any  one  particular  employee's  accomplishment.  A  satisfactory 
application  of  this  system  must  necessarily  involve  a  considera- 
tion of  non-productive  labor  and  operating  expense  as  well  as 
increase  of  output. 

391.  Premium  Wage  System. — The  best  known  and   most 
widely  used  gain-sharing  system  is  the  one  usually  called  the 
"Premium  System."     Its  chief  features  are  the  allowing  of  a 
definite  number  of  hours  to  do  a  certain  job,  and  of  any  time  the 
workman  saves  over  that,   he  gets  one-half  or  one-third  the 
benefit. 

The  name"Premium  System  "  is  frequently  a  bugaboo,  and  work- 
men who  will  refuse  to  work  under  it  when  called  "The  Premium 
System  "  will  be  successful  and  content  when  the  same  principles 
are  applied  and  called  by  such  names  as  " Bonus,"  "Gain-sharing/7 
"  Merit,"  "  Standard  Operation  Plan,"  etc.  Most  manufacturers 
use  the  50  per  cent,  gain-sharing  basis  in  all  cases.  It  has  been 
objected  that  under  the  50  per  cent,  scheme  the  workman  gets  an 
inordinately  high  increase  if  he  reduces  the  time  very  largely.  For 
instance,  if  a  man  does  a  ten-hour  job  in  five  hours  he  receives 
two  and  a  half  hours'  extra  pay,  or  50  per  cent,  increase  in  wages. 
If  he  does  the  ten-hour  job  in  four  hours,  he  receives  one-half  of 
the  six-hours'  saving,  or  three  hours  extra  pay  or  75  per  cent, 
increase  in  wages.  Conditions  in  operating  of  machinery  are 
such  that  if  time  standards  have  been  intelligently  fixed  by 
observations  made  by  a  specialist  so  as  to  represent  the  possible 
accomplishment  of  an  average  workman,  the  reduction  of  the 
time  standard  by  one-half  on  the  part  of  the  average  workman  is 
not  likely  to  be  possible.  Such  observational  data  are  not  always 
at  hand,  however.  The  term  "time  standard"  or  "standard 
time"  is  generally  used  to  designate  the  time  in  which  work 
should  actually  be  done  by  a  skilled  man  working  as  he  ought 
regularly  to  work,  with  the  correct  frequency  and  length  of  rest 
periods  so  as  to  avoid  fatigue.  The  term  "time  limit"  is  gene- 
rally used  to  designate  the  time  allowed  in  which  work  must  be 
performed  in  order  to  earn  premium.  It  is  equal  to  the 
standard  time"  plus  an  additional  amount  called  an 
"incentive." 

392.  Modifications   of   Premium    System. — Modifications  of 
the  premium  system  have  been  devised  which  provide  for  a  higher 


WAGE  SYSTEMS  349 

percentage  of  bonus  or  premium  wage  for  small  time  reductions 
and  a  smaller  increase  of  wages  for  large  time  reductions.  One 
of  these  systems  pays  10  per  cent,  increase  of  wages  for  a  10  per 
cent,  reduction  in  time,  15  per  cent,  increase  of  wages  for  20  per 
cent,  reduction  in  time,  20  per  cent,  increase  of  wages  for  30  per 
cent,  reduction  in  time,  etc.  The  objection  to  this  kind  of  system 
is  the  complication  involved  in  the  figuring  of  the  premium  pay- 
roll. It  is  easy  to  find  clerks  who  can  figure  intelligently  on  a 
50  per  cent,  basis,  but  it  is  hard  to  get  either  clerks  or  workmen 
to  understand  more  complicated  schemes.  On  the  other  hand,  if 
the  management  feels  that  it  is  best  to  introduce  as  a  starter  some 
kind  of  a  premium  wage  system  without  the  certain  knowledge  of 
shortest  attainable  times  which  the  author  recommends  as  a 
prerequisite,  and  which  can  only  be  attained  by  careful  observa- 
tional time-study,  then  it  will  be  advisable  to  use  some  sliding- 
scale  system  rather  than  the  so-called  straight  50  per  cent, 
gain-sharing  method  known  as  the  Towne-Halsey  system. 
Where  a  sliding  scale  is  decided  on,  it  is  advisable  to  tabulate  a 
schedule  covering  examples  of  work  taking  from  ten  minutes  to 
ten  hours  with  various  degrees  of  time  savings  and  the  corre- 
sponding premium  and  total  earnings  listed  which  would  corre- 
spond to  various  wage  rates.  This  printed  schedule  should  be 
distributed  to  all  workmen,  clerks,  and  others  involved  in  the 
system. 

The  Rowan  system  is  an  example  of  this  sliding-scale  premium 
plan.  In  this  system  the  workman  receives  as  a  premium 
addition  to  his  regular  rate  the  same  percentage  of  his  regular  rate 
as  the  time  saved  bears  to  the  time  allowed,  until  his  hourly  rate 
is  doubled,  which  is  the  maximum  he  can  earn.  To  illustrate 
the  Rowan  system  let  L  represent  the  time  limit  and  T  the  time 

taken.     Then  (    ^    )  is  the  percentage  of  the  time  taken  for 

which  the  worker  is  given  extra  or  premium  pay. 

393.  Notices  to  Employees  describing  Premium  Wage  System. 
—It  is  desirable  to  print  on  the  reverse  of  the  report  which  is  to 
accompany  each  employee's  premium  pay  an  outline  of  the 
system.  The  following  is  an  example  of  such  description: 

In  order  to  properly  compensate  those  employees  showing  the 
greatest  proficiency  in  turning  out  good  work  at  the  least  cost, 
this  Company  will  hereafter  pay  in  this  department,  in  addition 
to  the  regular  day  rates/ amounts  as  herein  specified  for  all  work 


350     FACTORY  ORGANIZATION  AND  ADMINISTRATION 

done  in  a  satisfactory  manner  within  certain  time  limits.  These 
time  limits  have  been  obtained  by  making  careful  time  and  motion 
studies  as  well  as  investigations  of  the  average  time  in  which  the 
work  has  been  done  in  the  past.  The  time  limit  in  each  case 
is  considerably  higher  than  the  shortest  time  in  which  the  work 
can  be  well  done.  As  there  have  been  numerous  cases  in  the  past 
in  which  the  work  has  been  done  in  less  time  than  the  time  limit, 
it  will  not  be  difficult  for  proficient  men  to  add  to  their  earnings; 
the  amount  of  increase  depending  solely  upon  individual  effort. 
There  is  no  risk  of  loss,  but  every  opportunity  for  gain. 

The  standard  time  limit  will  not  be  reduced  under  any  cir- 
cumstances, excepting  through  the  introduction  of  entirely  dif- 
ferent methods  of  doing  work,  hence  there  need  be  no  fear  of  earn- 
ing too  much  money.  Those  who  earn  the  most  will  be  worth  the 
most.  The  rates  per  hour  at  which  gains  will  be  figured  vary 
according  to  the  hourly  rates  of  each  workman  in  accordance 
with  the  schedule  given  below: 

Hourly  rate,  cents  per  hour  Gain-sharing  rate,  cents  per  hour 

$0.06-10.07  SO. 03 

0.08-  0.09  0.04 

0.10-0.11  0.05 

0.12-0.13  0.06 

0.14-0.15  0.07 

0.16-0.17  0.08 

0.18-0.19  0.09 

0.20-0.21  0.10 

0.22-0.23  0.11 

0.24-0.25  0.12 

0.26-0.27  0.13 

0.28-0.29  0.14 

0.30-0.31  0.15 

0.32-0.33  0.16 

The  conditions  governing  the  payment  of  gains  are  as  follows: 

Gains  will  not  be  paid  on  any  work  that  is  not  completed  to  the 
entire  satisfaction  of  the  foreman. 

No  allowance  will  be  made  for  bad  material  or  defective 
workmanship  in  any  previous  part  of  the  work,  unless  the  same 
is  pointed  out  to  and  endorsed  by  the  foreman  as  soon  as  dis- 
covered. 

All  gains  will  be  paid  for  on  the  first  regular  pay  day  following 
the  completion  of  the  work  upon  which  they  are  earned. 

On  account  of  its  being  impossible  to  test  certain  completed 


WAGE  SYSTEMS  351 

parts  immediately,  the  Company  reserves  the  right  to  deduct  from 
future  pay  such  gain-sharing  pay  as  may  have  been  advanced  on 
any  work  that  proves  defective  at  final  test. 

394.  Combined  Bonus  and  Premium  System. — The  danger  of 
workmen's  doing  the  work  in  too  low  a  time  is,  however,  not  the 
most  prevalent  difficulty  in  connection  with  merit  wage  systems. 
The  more  frequent  condition  is  one  of  general  apathy  or  indiffer- 
ence to  avail  themselves  of  the  advantages  offered,  and  to  have 
the  time  linger  within  the  10  and  20  per  cent,  reduction  area. 
In  order  to  overcome  this  difficulty,  some  shops  where  the  owners 
were  convinced  that  the  output  of  certain  machine  tools  could  be 
very  much  increased  found  it  necessary  to  put  their  time  limits 
decidedly  below  the  records  of  previous  accomplishment.  A 
knowledge  of  the  average  time  of  doing  work  which  is  the  custom 
in  any  particular  shop  is  far  more  prevalent  among  workingmen 
than  is  generally  supposed.  In  some  shops,  unless  a  very  strong 
inducement  is  made,  it  will  be  very  hard  to  secure  the  decided  time 
reductions  which  are  necessary  to  keep  up  with  modern  practice. 
In  such  cases  it  has  been  found  advisable  to  offer  a  liberal  in- 
crease in  wages  for  all  work  done  in  less  time  than  the  time  limit. 
While  engaged  in  a  shop  using  a  method  of  compensation  which 
paid  10  per  cent,  for  reduction  below  past  average  and  20  per 
cent,  for  turning  work  out  in  the  time  limit,  I  found  that  the 
method  was  good  only  to  a  certain  limit.  It  did  result  in  a  con- 
siderable proportion  of  the  men  doing  the  work  within  the  time 
limits.  However,  there  were  no  time  reductions  below  these 
limits  even  on  jobs  that  covered  a  period  of  a  number  of  weeks. 
This  was  natural  as  no  further  inducement  was  offered  for  re- 
duction of  time  below  the  time  limit,  hence  I  combined  with  this 
20  per  cent,  bonus  scheme  the  50  per  cent,  premium  method, 
offering  the  men  not  only  a  20  per  cent,  increase  in  wages  for 
all  jobs  successfully  completed  within  the  time  limit,  but  an 
additional  gain-sharing  premium  of  50  per  cent,  of  the  time 
saved  below  the  time  limit.  For  instance,  if  a  man  employed  at 
20  cents  an  hour  brings  out  successfully  in  ten  hours  a  job  on 
which  the  standard  time  was  fixed  at  12  hours,  he  receives  50 
per  cent,  of  the  saving  or  20  cents  extra  pay,  in  addition  to 
receiving  an  increased  wage  rate  of  24  cents  an  hour  for  all  work 
successfully  done.  The  offering  of  this  extra  inducement  could 
not  possibly  lead  to  "  fatigue  or  nervous  strain  by  over-ambi- 
tious workers,"  since  the  time  limits  were  from  40  to  60  per 


352    FACTORY  ORGANIZATION  AND  ADMINISTRATION 


cent,  higher  than  standard  times  which  in  themselves  included 
due  additions  for  correct  frequency  and  length  of  rest  periods. 

395.  Notices  to  Employees,  Describing  Combined  Bonus  and 
Premium  System. — In  order  that  all  employees  might  fully 
understand  the  foregoing  plan,  a  folder  containing  the  following 
information  was  printed  and  distributed: 


In  order  that  all  employees  may 
be  thoroughly  familiar  with  the  con- 
ditions and  rulings  in  connection 
with  the  Standard  Operation  Plan, 
the  followingout  line  has  been  pre- 
pared: 

1.  The  20  Per  Cent.  Increase  for 

Success 

For  all  jobs  successfully  completed 
within  the  time  limit,  the  Com- 
pany will  pay  in  addition  to  the 
regular  hourly  wages  at  which  a  man 
is  employed,  an  increase  of  20  per 
cent,  over  his  regular  hourly  rate. 
For  instance,  a  man  employed  at 
20  cents  an  hour  will  be  paid  24 
cents  an  hour  for  all  work  success- 
fully done  under  Standard  Operation 
Plan. 

2.  The  50  Per  Cent.  Bonus  for  Gain 

For  all  jobs  successfully  com- 
pleted within  less  than  the  time 
limit,  the  Company  will  pay  in  ad- 
dition to  the  20  per  cent,  increase  as 
explained  in  Section  1,  a  gain-sharing 
bonus  of  50  per  cent,  of  the  man's 
base  rate  for  all  time  gained.  For 
instance,  if  a  man  employed  at  20 
cents  an  hour  brings  out  success- 
fully in  10  hours  a  job  on  which  the 
time  limit  is  fixed  at  12  hours,  he 
receives  50  per  cent,  of  the  saving 
or  20  cents  extra  pay  in  addition  to 
receiving  24  cents  an  hour  for  all 
work  successfully  done  under  Stand- 
ard Operation  Plan.  All  those  that 
desire  to  take  advantage  of  the  50 


per  cent,  or  gain-sharing  feature  of 
the  plan  can  do  so  by  notification  to 
their  foreman. 

3.  Quality  of  Work 

Work  must  be  completed  to  entire 
satisfaction  of  foreman  and  inspector. 
Time  is  counted  for  good  work  only. 
For  instance,  if  a  man  has  10  pieces 
to  do  and  spoils  one,  the  time  is 
counted  as  applying  on  9  pieces 
finished. 

4.  Extra  Work  on  Account  of  Bad 

Castings 

In  case  a  casting  shows  flaws  after 
machine  work  is  begun,  foreman's 
attention  must  be  called  to  same  at 
once.  If  casting  is  then  thrown  out, 
foreman  will  determine  allowance  for 
time  spent  on  same,  and  will  enter 
allowance  on  a  credit  slip,  which  he 
gives  workman  who  will  hand  credit 
slip  to  timetaker  at  his  next  round. 
Timetaker  will  enter  credit  in  "Re- 
marks" column  of  time  sheet.  The 
above  applies  to  any  defective 
material. 

5.  Extra  Time  on  Account  of  Break- 
downs  or   Other   Unavoidable 

Causes 

Foreman's  attention  must  be 
called  to  such  time  at  once  and  he 
will  determine  allowance  if  any,  and 
hand  workman  credit  slip.  Work- 
man will  hand  timetaker  credit  slip 
at  his  next  round,  and  timetaker  will 


WAGE  SYSTEMS 


353 


enter  credit  if  any,  same  to  be 
verified  by  foreman.  Workmen  are 
not  permitted  to  work  on  machinery 
repairs  .  excepting  those  regularly 
engaged  on  this  work. 

6.  Several  Men  Working  on  Same 
Standard  Operation 

Where  Standard  time  work  is  of 
such  nature  that  it  requires  to  be  par- 
ticipated in  by  a  group  of  several 
men,  each  man's  share  of  the  bonus, 
if  any,  will  be  in  proportion  to  the 
number  of  hours  he  has  put  in  on 
the  job. 


7.  Time  Within  Which  Work  Must 
be  Done 

Time  limits  as  fixed  constitute 
the  limits  allowed  and  work  must  be 
done  within  these  time  limits  if 
credit  is  desired  for  the  bonus  for 
success. 

8.  Unfinished  Work 

Any  man  working  on  a  Standard 
Operation  job  and  not  finishing 
same,  will  be  paid  bonus  if  any,  on 
only  the  actual  number  of  pieces  in 
the  lot  on  which  complete  operation 
has  been  performed.  If  operation 
has  been  partly  completed  and  the 
work  is  finished  by  some  one  else, 


workman  starting  the  job  forfeits 
his  bonus,  and  workman  finishing 
the  job  will  be  paid  a  bonus  on  same 
only  if  job  is  finished  within  a  reason- 
able time  limit.  It  will  be  left  to 
the  foreman  to  determine  if  this  has 
been  done. 

9.  Difficulties  Preventing  Success 

It  is  the  Company's  desire  to 
take  every  step  possible  to  remove 
any  obstacles  standing  in  the  way  of 
accomplishing  any  job  in  the  time 
limit.  They  wish  and  expect  the 
men  to  make  money  out  of  the 
Standard  Operation  Plan.  They 
also  wish  men  and  foremen  to  feel 
free  to  make  suggestions  for  improve- 
ments which  may  remove  any  diffi- 
culties in  the  way  of  making  the 
stints  regularly.  Suggestions  will 
be  acted  upon  as  promptly  as  condi- 
tions will  permit,. 

10.  Permanence  of  Time  Limit 

Time  Limits  once  fixed  will  not 
be  changed  excepting  on  account  of 
changes  in  design,  introduction  of 
new  tools,  or  entirely  different 
methods  of  doing  the  work. 

11.  Payment  of  Bonus 

The  payment  of  bonus  is  made 
every  week. 


396.  Bonus  System  or  "Task  Work  with  a  Bonus." — Another 
merit  scheme  is  one  known  as  the  daily  task  bonus  system,  whose 
object  is  to  secure  the  performance  of  all  tasks  in  any  one  day 
within  the  standards  prescribed.  It  sometimes  happens  that 
conditions  are  such  that  men  will  do  one  job  in  very  good  time, 
and  then  lose  out  more  on  the  next  job  than  they  gained  on  the 
first.  This  bonus  scheme,  which  was  devised  to  overcome  this 
difficulty,  is  to  pay  a  fixed  amount  of  money,  say  25  or  50  cents 
every  day,  as  an  incentive  to  a  man  to  do  all  of  his  tasks  within 
the  standard  times  set. 

23 


354     FACTORY  ORGANIZATION  AND  ADMINISTRATION 

397.  Individual  Job  Bonus  System. — Some  shops  have  pre- 
ferred to  fix  a  money  price  for  the  accomplishment  of  certain  work 
rather  than  a  time  value.  Their  reason  for  this  is  to  prevent  cer- 
tain classes  of  work  costing  them  too  much  money,  when  this  work 
is  undertaken  by  a  high-priced  man.  For  instance,  if  under  the 
premium  system  a  time  limit  of  ten  hours  were  put  on  a  job,  and 
a  30-cent  man  did  the  job  in  six  hours,  the  cost  of  the  work  to  the 
company  would  be  six  hours  at  30  cents  plus  four  hours  at  15 
cents,  or  $2.40.  On  the  other  hand,  if  a  25  cents  an  hour  man  had 
accomplished  the  work  in  the  same  time,  the  cost  of  the  job  would 
have  been  six  hours  at  25  cents  plus  four  hours  at  12  1/2  cents,  or 
$2.  Now  the  company  might  find  that  it  could  not  afford  to  have 
this  piece  of  work  cost  in  flat  labor  more  than  $2.25.  The  gain- 
sharing  would  be  one  of  money  saved  the  company.  This  is 
really  a  more  equitable  basis  than  the  hourly  plan,  inasmuch  as 
the  high-priced  man  has  his  higher  hourly  going  rate  which  guar- 
antees his  day  pay,  and  he  should  necessarily  have  to  exert  him- 
self more  by  the  use  of  either  his  ingenuity  or  muscles  if  he  expects 
to  get  a  higher  bonus  or  premium  than  his  fellow  craftsman 
working  at  a  lower  hourly  rate. 

The  following  tabulation  as  used  by  Frederick  Parkhurst  is 
an  example  of  a  sliding  bonus  scale. 

PRESS  243.    ERECT  COMPLETE  PER  MATERIAL  LIST  L3284.    THIS  CHART 
INCLUDES  ALL  HAND  WORK  ON  ALL  THE  INDIVIDUAL  PIECES 


Time  each 

Bonus  each 

6.0  hours 

$0.40 

5  .  8  hours 

0.42 

5  .  6  hours 

0.44 

5.4  hours 

0.46 

5.2  hours 

0.48 

5  .  0  hours 

0.50 

4  .  8  hours 

0.52 

4.6  hours 

0.54 

4.4  hours 

0.56 

4  .  2  hours 

0.58 

4  .  0  hours 

0.60 

398.     Incentives  to   Securing  Continuous  Efficiency. — It  is 

quite  possible  to  avoid  the  troubles  of  men's  doing  some  jobs  in  a 
day  quickly,  and  taking  inordinately  long  times  on  others,  by 
keeping  record  of  individual  workmen's  efficiency  and  by  offering 
rewards  for  the  greatest  percentage  of  individual  success  to  indi- 
vidual workmen.  A  further  inducement  will  be  a  prize  for  great- 


WAGE  SYSTEMS 


355 


est  collective  success  by  the  men  in  certain  departments.  Prizes 
to  foremen  should  be  based  not  only  on  time  reduction,  but  on 
ratio  of  non-productive  operating  expense  to  productive,  percent- 
age of  time  and  of  department  pay-roll  lost  on  account  of  defec- 
tive workmanship  and  similar  considerations. 

Fig.  172  shows  a  form  for  Workman's  Efficiency  and  Premium 
Record  under  the  combined  Premium  and  Bonus  system  de- 
scribed in  paragraphs  384  and  385.  This  record  affords  the 
basis  for  calculating  each  man's  percentage  of  success  as  well 


WORKMAN'S  EFFICIENCY  AND  PREMIUM  RECORD 

EMPLOYE                                                               EMPLOYE 
NAME        G.I.Stevens                             NUMBER       C  26                DEPT.  Murs               KATE  18 

FORM  B  616-5-25-05-2M 

WEEK  ENDING 

TOTAL 
ON  50 

SUCCESS 

GAIN 

FAILURE 

LOSS 

BONUS 

REMARKS 

H. 

M. 

H. 

M. 

H. 

M, 

H. 

M. 

H. 

M. 

X 

X 

June     14  /05 

45 

50 

31 

10 

52 

14 

40 

6 

40 

2 

59 

^£Zr      =       83.7% 

21 

S8 

05 

22 

50 

10 

5 

15 

2 

45 

2 

05 

Gain          =          7.8  % 

28 

34 

40 

34 

40 

1 

47 

99 

Loss          =         16.0  % 

July        5 

30 

45 

28 

15 

8' 

14 

2 

35 

1 

15 

Total 

TOTAL  FOR  PERIOD 

139 

20 

116 

55 

77 

03 

22 

30 

10 

40 

5 

62 

July  15/05 

July      12 

40 

35 

37 

20 

3 

27 

3 

15 

1 

38 

19 

28 

05 

17 

25 

3 

20 

10 

40 

5 

10 

Su££,s      =       76.8% 

26 

39 

23 

15 

45 

15 

45 

7 

50 

Gain          =          8.5% 

Aug       2 

34 

55 

31 

45 

4 

47 

3 

10 

1 

25 

Total  Loss  =    11.2% 

TOTAL  FOR  PERIOD 

142 

35 

709 

45 

12 

19 

32 

50 

16 

03 

5 

58 

lotal 

Aug        9 

17 

10 

17 

16 

3 

18 

16 

26 

06 

22 

24 

12 

3 

42 

2 

12 

23 

24 

35 

21 

25 

1 

03 

3 

10 

I 

45 

TOTAL  FOR  PERIOD 

FIG.  172. 

as  loss  and  gain  percentages.  Promotion  and  extra  prizes  are 
awarded  to  those  men  showing  the  greatest  continuous  efficiency. 
The  employee  of  highest  standing  under  this  system  would  be 
the  man  whose  percentage  would  be  highest  based  on  the  calcula- 
tion of 

Success     Gain      Loss 
Total  ~l~Total~~Total 

Inserting  in  this  formula  the  figures  given  in  the  example  in 
Fig.  172  we  have  efficiency  of  G.  I.  Stevens  for  period  of  June  14 
to  July  5  =  83.7  per  cent.  +  7.8  per  cent.  —  16.0  per  cent.  =  75.5 
per  cent. ;  for  period  Julv  12  to  Aug.  2  =  76.8  per  cent.  +  8.5 
per  cent.  —11.2  per  cent.  =  74.1  per  cent. 


356     FACTORY  ORGANIZATION  AND  ADMINISTRATION 


The  ten  employees  showing  the  highest  averages  through  a 
period  of  six  months  receive  an  increase  of  wages  of  2  1/2  cents 
per  hour.  In  addition  the  highest  three  men  receive  cash  prizes. 

399.  Figuring  Premium  or  Bonus  Pay  Rolls. — The  system  and 
statistical  methods  for  a  premium  or  gain-sharing  wage  scheme 
involve  the  same  methods  as  for  the  day  rate,  namely,  clock 
record  of  attendance,  time-keeping  covering  time  taken  and 
amount  of  work  done  on  every  operation  unit  on  which  a  time  or 
money  standard  is  fixed.  In  addition  to  the  regular  pay-roll, 
there  will  have  to  be  a  system  of  postings  for  the  premium  or 
bonus  pay-roll.  The  cost-accounting  system  must  also  be  modi- 
fied to  permit  of  proper  allotment  of  the  bonus  money  so  as  to 
show  true  cost. 


DUPLICATE 
WEEKLY  GAIN    REPORT   FOB   WEEK   FNDINR 

NAM.E                                        ruee>u  u<\                   DFP-T                    wiriF  B/^JE 

:  GAIN    SHARING   RATE  

ORDER 
NO. 

NO. 
PIECES 

NAME    OF  PART 

OPERATION 

TIME 
LIMIT 

TIME 

TAKEN 

GAOR(+ 

LO&(-: 

GAIN 

$ 

CTS- 

' 

1 

TOTAL  TIME  W'K'B                  -pup  W'K'n  y/iTnf>^T  LIMIT                 TIMF  1  OST 

TOTAL 
GAIN 

Fm.  173. — A  report  of  the  week's  gain  or  loss  in  time.     White  card,  6  inches 
wide,  4  inches  high. 

The  simplest  way  to  take  care  of  a  premium  or  bonus  pay-roll 
is  to  keep  it  entirely  distinct  from  the  regular  pay-roll. 

Fig.  172  shows  a  card  form  used  for  collecting  the  time  and 
figuring  the  premium  pay-roll. 

400.  Notifications  to  Workmen  of  Gains  or  Losses  under 
Premium  or  Bonus  System.— Fig.  173  shows  a  form  used  for 
collecting  these  same  data  on  to  a  weekly  slip.  The  weekly 
slip  is  written  out  in  duplicate,  one  copy  going  to  the  man  with 
his  envelope  of  premium  money,  the  other  being  filed  in  a  loose 
leaf  binder  under  the  man's  name,  thus  forming  a  record  of  the 
man's  performances  under  the  system. 


WAGE  SYSTEMS  357 

With  either  of  the  above  forms  a  separate  slip,  as  shown 
in  Fig.  174,  is  used.  This  slip  serves  as  a  notification  and  record 
to  the  workman  which  he  uses  in  checking  his  pay.  One  or  more 
carbon  copies  can  be  made  out  at  the  same  writing,  and  can  be 
used  as  a  comparative  time  record  when  filed  under  guides  repre- 
senting parts.  This  form  also  serves  a  useful  purpose  in  filing 
with  regular  cost-posting  cards,  in  which  time  has  been  figured  on 
the  straight  wage  basis,  to  show  the  amount  that  must  be  added 
to  individual  part  costs  on  account  of  premium  pay.  The 


NOTIFICATION  TO  WORKMAN 
OF  GAINS  ON  STANDARD  OPERATION  WORK 


Employe  No.  Date 


Employe's  Name  Depx. 


Shop  Order  No.  of  Pieces  Finished 


Name  of  Part 


Operation  S.O.Time 


Actual  Time  on  Job  Mrs.  Min. 


Time  Gained Mrs. Mins. 


NOTICE :    We  are  always  glad  to  have  our  men  make  suggestions  for  changes  in 


fixtures,  appliances  or  tools  to  facilitate  the  work. 


If  an  idea  occurs  to  you,  write  it  out  and  put  it  in  suggestion  box. 


Prizes  are  offered  for  best  suggestions. 


FIG.  174. — Workman's  notice  of  gains  under  premium  wage  system. 
Pink  bond  paper,  6  inches  wide,  4  inches  high.  For  failure  a  similar  blue 
slip  is  used  with  the  words  "Time  Lost"  instead  of  "Time  Gained." 

carbon  copies  filed  by  parts  are  looked  over  by  the  time-study 
and  rate-fixing  department.  If  there  is  a  tendency  to  fail  to 
do  the  work  in  the  time  limit,  the  workman  is  helped  by  dem- 
onstration and  instruction  to  do  the  work  in  accordance  with 
the  instruction  card  built  up  from  the  time  study  on  which  the 
time  limit  was  based. 

401.  Foreman's  Participation  in  Bonus. — The  foreman's  bonus 

has  been  one  of  the  least  considered  and  most  hastily  installed. 

incentives.     If  the  foreman's  bonus  is  based  on  the  total  bonus 

of  all  of  the  employees,  without  any  modifying  factor  based  on 

his  departmental  overhead  expense,  it  is  quite  likely  that  the 


358      FACTORY  ORGANIZATION  AND  ADMINISTRATION 

wear  and  tear  and  general  expense  account  of  his  department 
will  be  very  high.  If  the  foreman's  bonus  is  based  on  the  piece 
rate  value  of  the  production  in  his  department  and  there  is  no 
factor  modifying  his  bonus  by  reducing  it  if  the  labor  turnover  in 
his  department  is  high,  then  he  could  keep  his  workers  on  day 
work,  realize  a  good  bonus,  and  lose  money  for  his  employers 
by  a  heavy  labor  turnover.  During  the  war  many  a  foreman's 
bonus  based  on  the  gross  production  turned  out  in  his  department 
resulted  in  ridiculously  high  figures,  compensating  foremen  in 
amounts  of  money  so  large  that  they  made  higher  salaried 
employees  gasp  in  astonishment  and  disgust.  It  will  be  seen, 
therefore,  that  the  foreman's  share  in  efficiency  reward  must  be 
limited  by  such  factors  as  overhead  expense  and  labor  turnover 
in  particular  and  that  he  be  not  rewarded  for  mere  quantities  of 
increases  in  production  due  to  added  men  and  added  equipment, 
causing  an  increase  in  production  for  which  the  foreman  is  not 
in  any  way  responsible.  The  foreman  must  help  the  poorer 
workers.  This  is  secured  by  giving  him  an  extra  bonus  if  all 
his  workers  earn  bonus. 

REFERENCES 

GOING:  "Principles  of  Industrial  Engineering,"  Chapter  VIII. 

GANTT:  "Work,  Wages  and  Profit,"  Chapters  III  to  VI  inclusive. 

CARPENTER:  "Profit  Making  Management,"  Chapters  VIII  to  XI 
inclusive. 

EMERSON:  "Efficiency,"  Chapters  VI,  IX,  and  X. 

Taylor:  "Shop  Management,"  Parts  93-201  inclusive. 

GILBRETH:  Primer  of  Scientific  Management,"  Pages  20-30  inclusive. 

ENNIS:  "Works  Management,"  Chapter  IV. 

TOLMAN:  "Social  Engineering." 

SCHLOSS:  "Methods  of  Industrial  Remuneration." 

TAYLOR:  "A  Piece  Rate  System,"  A.  S.  M.  E.  paper,  DCXLVII,  Vol. 
XVI. 

HALSEY:  "The  Premium  Plan,"  A.  S.  M.  E.  paper,  CCCCXLIX,  Vol. 
XII. 

TOWNE:  "Gain  Sharing,"  A.  S.  M.  E.  paper  CCCXLI,  Vol.  X. 

GANTT:  "A  Bonus  System  of  Rewarding  Labor,"  A.  S.  M.  E.  paper, 
928,  Vol.  XXIII  . 

PARKHURST:  "Applied  Methods  of  Scientific  Management,"  pages 
166  to  180. 

EMERSON:  "The  Twelve  Principles  of  Efficiency,"  Chapter  XIV. 

EMERSON:  Efficiency,"  Chapter  X. 

TAYLOR:  "Shop  Management,"  Paragraphs  45  to  191. 

KNOEPELL:  "Installing  Efficiency  Methods,"  Chapter  XVII. 


CHAPTER  XXVII 
PRINCIPLES  UNDERLYING  GOOD  MANAGEMENT 

402.  Clear-cut   Organization. — The   advantages    of  clear-cut 
departmental  organization  have  already  been  set  forth.     Where 
each  department  head  and  each  individual  knows  his  exact 
duties  and  the  limits  of  his  authority,  there  will  be  no  trouble  due 
to  misunderstanding  of  these  matters.     Purely  mechanical  con- 
trol through   charts   and  written   rules   and  regulations   does 
not  constitute  good  management.     Strength  of  character,  high 
ethical    standards,  human   sympathy   and   sound   psychologic 
insight  are  essential  qualities  of  successful  officials. 

403.  Mutual  Confidence  and  Co-operation. — Mutual  confidence 
is  absolutely  essential  to  good  management.     This  requires  that 
officers  and  department  heads  must  be  honest  with  each  other 
and  with  their  men.     One  of  the  results  of  many  years  of  industrial 
mismanagement  is  the  attitude  of  suspicion  of  many  workingmen 
toward  employers  and  their  representatives,  whenever  there  is 
any  change  in  department  heads,  methods  of  manufacture,  or 
system,  suspecting  that  something  is  going  to  happen  that  is 
detrimental  to  their  interests,  and  ready  to  oppose  in  every  con- 
cealed  manner  possible  the  new  official,  method,  or  system. 
There  is  only  one  way  to  get  rid  of  these  difficulties,  and  that  is 
by  actually  making  the  best  interests  of  the  men  identical  with 
the  best  interests  of  the  company.     To  men  and  managements 
embittered  by  long  years  of  hostility  engendered  by  mismanage- 
ment such  a  statement  will  seem  puerile.     It  needs  but  a  little 
investigation  of  the  discussions  and  publications  of  employers' 
organizations  as  carried  on  to-day,  and  a  comparison  of  these 
with  similar  discussions  some  ten  or  fifteen  years  ago,  however, 
to  prove  that  co-operation  is  taking  the  place  of  warfare  to  a  won- 
derful  extent. 

The  co-operation  must  be  honest.  There  must  be  no  wishy- 
washy  namby-pambyism.  A  lot  of  rah-rahing  at  a  company 
baseball  game  is  no  sign  that  employees  don't  laugh  up  their 
sleeves  at  insincere  patronizing. 

359 


360     FACTORY  ORGANIZATION  AND  ADMINISTRATION 

Frequent  changes  tend  to  break  down  mutual  confidence, 
hence  the  problem  of  employment  should  be  handled  in  a  most 
deliberate  and  capable  manner  so  as  to  lessen  the  need  of  dis- 
charge to  a  minimum.  On  the  other  hand,  while  the  establish- 
ment of  a  permanent  .force  of  employees  will  carry  with  itself 
some  of  the  spirit  which  results  in  the  establishment  of  mutual 
confidence,  it  is  necessary,  where  there  is  a  working  force  in  which 
there  are  many  old  employees,  constantly  to  guard  against  accept- 
ing as  correct  and  unchangeable  any  long-existing  conditions  of 
affairs.  Records  of  what  was  the  best  performance  in  the  past 
must  not  serve  as  a  guide  to  what  future  performances  will  be, 
since  materials  and  processes  are  always  changing. 

Mutual  confidence  and  co-operation  cannot  exist  where  the 
policy  prevails  of  pitting  departments  against  each  other  and 
encouraging  hostile  competition.  A  good  executive  will  never 
employ  the  objectionable  practice  of  asking  men  their  opinions 
about  each  other  and  each  other's  work.  Neither  will  he  employ 
a  scheme  which  was  necessary  during  the  war  but  which  in  peace 
time  is  wholly  out  of  place;  namely,  a  detective  or  intelligence 
service.  A  guard  should  be  a  guard  pure  and  simple  and  not  a 
carrier  of  gossip.  If  encouraged  in  the  latter,  there  is  always  the 
possibility  that  he  will  make  every  effort  to  be  delivering  the 
goods,  whether  based  on  facts  or  not. 

404.  Officials  to  be  Relieved  of  Petty  Duties.— There  should  be 
some  officer  in  every  manufacturing  establishment  who  is  free 
enough  from  routine  duties  to  permit  of  his  keeping  constantly 
on  the  alert  in  the  matter  of  improving  the  manufactured  product, 
so  that  the  company  may  always  be  prepared  to  make  changes  at 
the  proper  time  and  keep  the  product  up  to  date.  Manifestly 
the  proper  time  is  not  when  the  shop  is  crowded  with  a  heavy  de- 
mand for  a  current  design  which  is  serving  its  purpose  without 
any  complaints  from  customers  and  without  serious  competition. 
It  is  always  good  policy  to  adhere  to  established  standards  as 
long  as  the  market  will  permit,  unless  new  standards  mean  a 
most  decided  advantage  to  the  manufacturer.  This  officer  should 
have  charge  of  the  record  of  all  criticisms  of  product,  and  should 
arrange  such  matters  for  discussion  by  salesmen  and  factory 
officials  who  would  be  affected  by  changes  in  design. 

In  most  manufacturing  establishments  this  matter  of  changes 
is  not  handled  systematically.  On  the  one  hand,  slight  alterations 
of  no  decided  selling  advantage  may  mean  loss  of  stock  on  hand, 


PRINCIPLES  UNDERLYING  GOOD  MANAGEMENT       361 

delays  in  manufacture,  and  increased  costs.  On  the  other  hand, 
a  lack  of  foresight  in  anticipating  needed  changes  may  result 
in  heavy  business  losses. 

405.  Internal  Harmony  Essential. — In  the  matter  of  dealing 
with   men,  managing    officers  should  assume  always  that  the 
best  interests  of  all  of  the  men  are  identical  with  those  of 
the  management.     There  should  be  no  attention  paid  to  talks 
of  intrigue  or  inter-departmental  knocking.     At  the  same  time 
the  managing  officials  can  easily  locate  jealousies  and  unwar- 
ranted ambitions  on  their  own  initiative  if  they  are  capable 
managers.     It  may  be  necessary  to  have  plain  talks  with  de- 
partment heads  who  are  over-ambitious,  and  to  explain  to  them 
wherein  their  course  is  in  error,  or  why  their  ambitions  can- 
not be  realized.     In  some  cases  it  may  be  best  for  all  concerned 
if  the  management  can  find  a  better  position  elsewhere  for  some 
department  head  who  is  deserving  of  promotion,  but  for  whom  the 
management  can  find  no  promotion  in  its  own  organization. 

406.  A  Successful  Business  the  Accumulation  of  Many  Men's 
Ideas. — It  must  always  be  remembered  that  any  successful  busi- 
ness  represents   an  accumulation  of  the  ideas  of  many  men. 
Hence,  the  endeavor  should  be  to  encourage  the  expressing  of 
ideas  for  betterment  of  product,  of  methods,  and  of  systems,  by 
the  rank  and  file  and  by  the  line  and  staff  as  well.     There  is  no 
question  but  that  the  committee  method  tends  toward  bringing 
out  good  ideas.     The  same  is  true  of  good  suggestion  system  with 
prizes  or  promotions  for  men  making  the  best  suggestions. 

407.  Suggestion  Systems. — In  operating  a  suggestion  system, 
care  should  be  taken  that  the  committee  on  awards  are  thoroughly 
capable  of  judging  of  the  merits  and  demerits  of  the  suggestions 
they  consider.     Suggestion  systems  are  usually  operated  on  the 
basis  of  an  award  each  month  consisting  of  three  or  five  cash  prizes, 
and  mention  of  the  names  of  others 'making  good  suggestions  which 
did  not  win  prizes.     Much  of  the  force  of  a  suggestion  system  is 
lost  if  the  suggestions  for  which  prizes  are  given  are  not  put  into 
practice.     Annual  awards  for  those  suggestions  which  have  re- 
sulted in  the  greatest  good  during  the  year,  in  addition  to  the 
monthly  awards,  will  tend  to  round  out  the  suggestion  system  to 
still  greater  efficiency. 

408.  Shop  Committees  and  Industrial  Democracy. — The  com- 
mittee  method    and    anything   else    connected    with   the   shop 
management  should  be  free  of  anything  savoring  of  patronizing, 


362      FACTORY  ORGANIZATION  AND  ADMINISTRATION 

hence  it  is  well  to  avoid  calling  the  committees  by  fancy  names, 
such  as  "Council,"  " Junior  Council,"  etc.  A  condition  of 
mutual  confidence  must  be  established,  otherwise  the  committee 
meetings  will  contain  men  who  are  silent,  being  afraid  to  make 
criticisms,  fearing  to  incur  ill-will  or  displeasure,  or  unwilling 
to  make  suggestions  for  improvement  for  fear  of  their  suggestions 
being  ignored  or  having  their  ideas  claimed  by  others. 

In  recent  years  there  has  been  a  development  of  the  committee 
system  especially  in  shops  not  having  any  clear,  good  organization 
or  functional  control.  In  these  shops  there  has  been  a  tendency 
to  let  shop  committees  take  the  initiative  in  developing  company 
policies  and  methods.  In  a  well  organized  industry,  men  cap- 
able of  developing  policies  and  methods  would  have  been  recog- 
nized, selected  and  appointed  to  positions  wherein  they  could 
direct  such  matters.  The  general  adoption  of  the  direct  action 
type  of  industrial  democracy  whereby  elected  rather  than  selected 
workers  direct  methods,  policies  and  management,  is  in  the 
writer's  opinion,  in  the  majority  of  cases,  apt  to  result  in  mis- 
government  by  the  unfit.  It  is  not  conceivable  that  such  a 
type  of  control  can  result  in  industrial  efficiency  in  competition 
with  plans  of  organization  which  carefully  find  and  develop 
those  whose  physical,  mental,  and  temperamental  traits  fit 
them  for  each  specialty  or  function. 

Shop,  committees  have,  however,  a  perfectly  proper  place  in 
industry;  namely,  as  advisory  committees  to  let  the  manage- 
ment know  what  the  employees  think,  to  bring  to  light  certain 
abuses,  and  to  afford  an  opportunity  for  the  management  to 
explain  its  policies  to  the  employees.  Shop  committees  carried 
on  in  this  way  are  quite  different  from  management  of  a  business 
through  the  industrial  democracy  by  direct  action  idea,  however. 

409.  Systematic  and  Scientific  Selection  and  Placing  of  Men. 
— Managing  officers  and  heads'  of  departments  should  be  endeav- 
oring to  ascertain  the  natural  aptitude  of  each  individual,  and 
put  him  into  such  a  department  and  at  such  work  as  he  is  best 
fitted  for.  The  most  efficient  line  officers  are  declared  by  many 
successful  managers  to  be  men  whose  characteristics  are  unswerv- 
ing devotion  to  duty  and  dogged  tenacity,  rather  than  men  of 
bright  intellect,  technical  ability,  and  attractive  personality. 
The  last-named  qualities  are  by  no  means  disadvantageous, 
but  they  cannot  take  the  place  of  the  first-mentioned  ones. 

In  the  matter  of  appointing  department  heads  and  foremen,  it 


PRINCIPLES  UNDERLYING  GOOD  MANAGEMENT       363 

should  be  borne  in  mind  that  while  a  good  spirit  is  engendered 
by  promoting  men  from  the  ranks,  it  is  necessary  to  appoint  a 
certain  proportion  of  men  from  the  outside  who  have  had  wider 
experience  than  that  which  can  be  obtained  in  any  one  shop. 
At  the  same  time,  whenever  a  department  head  or  foreman  is 
taken  into  the  company  from  outside  it  must  be  borne  in  mind 
that  there  is  apt  to  be  some  one  disappointed,  whose  good-will 
may  be  lost,  hence  an  outsider  appointed  as  a  department  head 
or  foreman  needs  especially  to  possess  ability  to  get  along  with 
men,  and  if  there  is  any  doubt  on  this  score  he  should  not  be 
appointed,  no  matter  what  his  technical  ability  may  be.  The 
foreman  or  department  head  is  always  looked  upon  as  the  com- 
pany's direct  representative  among  the  men,  and  the  opinion  of 
the  men  as  to  the  company  is  based  upon  their  opinion  of  the  fore- 
man or  department  heads. 

410.  Justice  in  Wage  Systems. — All  systems  of  piece  work, 
bonus  or  premium  wrage,  must  be  just  and  reasonable.  There  is 
hardly  any  shop  where  the  same  system  of  compensation  can  be 
made  to  apply  to  all  work,  and  to  be  able  to  say  that  all  of  the 
company's  work  is  on  piece  work  or  on  the  bonus  system  is  likely 
to  be  nothing  at  all  to  brag  of.  It  would  be  far  better  to  be  able  to 
say  that  all  of  the  work  which  can  be  advantageously  done  on  a 
piece-work  or  bonus  basis  is  placed  on  that  basis. 

In  the  matter  of  wage  systems,  much  trouble  can  be  forestalled 
by  making  it  a  rule  that  a  certain  piece  rate,  premium,  or  bonus 
time  is  established  for  each  separate  machine  and  process,  and 
have  this  most. distinctly  understood  and  specified.  By  distinctly 
specifying  that  a  certain  premium,  bonus  or  piece  rate  applies 
to  machine  No.  so  and  so  and  only  to  machines  of  the  same  type, 
style  and  condition,  and  driven  in  the  same  manner,  there  can  be 
possible  complaint  if  the  rate  is  changed,  as  it  should  be,  if  a 
different  type  of  machine  is  installed  or  machinery  is  driven  in  a 
different  way.  There  can  be  only  one  rational  basis  for  piece, 
premium,  or  bonus  times,  and  that  is  an  absolutely  certain  knowl- 
edge of  conditions  currently  existing  and  applying  to  each  separ- 
ate machine  or  method.  Men  experienced  at  rate-fixing  can 
establish  many  such  time  standards  from  the  records  of  observa- 
tions on  similar  work.  However,  the  utmost  caution  should 
be  observed  in  establishing  standards  without  demonstrations, 
since  nothing  establishes  confidence  in  the  ability  and  justice 
of  the  management  in  a  more  satisfactory  way  than  time  stand- 


364      FACTORY  ORGANIZATION  AND  ADMINISTRATION 

ards,  which  are  neither  too  low  nor  too  high,  but  are  eminently 
correct  at  their  first  announcement.  An  expert  machine  operator 
usually  makes  a  poorer  job  of  establishing  time  standards  than  a 
technically  educated  man  used  to  taking  and  recording  observa- 
tional data.  On  the  other  hand,  if  the  expert  machine  operator  or 
expert  mechanic  in  other  lines  be  used  as  demonstrator,  and  a 
man  skilled  at  accurate  observational  records  be  assigned  to  do 
the  timing,  the  results  are  far  more  likely  to  be  satisfactory.  It 
is  impossible  to  secure  a  man  who  is  an  expert  operator  on  all 
kinds  of  machinery,  and  it  is  utter  folly  to  hire  as  a  speed  boss,  or 
rate  fixer,  a  man  who  claims  to  be  such  a  prodigy.  A  man 
experienced  at  time-study  work,  using  such  mechanics  for  demon- 
strators as  each  department  can  furnish,  these  mechanics  receiv- 
ing extra  pay  while  on  demonstration  work,  will  secure  correct 
time  standards.  If  the  time-study  man  claims  to  be  a  universal 
expert  on  all  kinds  of  machinery,  he  may  at  once  be  set  down  as  a 
quack  and  a  man  who  will  cause  more  friction  than  good. 

411.  Sufficient   Clerical  Force. — Sufficient   clerical    force    to 
get  out  all  of  the  needed  records  and  departmental  reports  does 
not  necessarily  mean  many  non-producers.     The  only  use  of 
records  and  departmental  reports  is  as  an  incentive  to  action. 
There  is  absolutely  no  use  of  a  transfer  clerk  or  good  tracing 
records  if  the  shop  superintendent  or  general  foremen  do  not  make 
use  of  these  records.     The  same  is  true  of  all  reports  having  to  do 
with  cost-analysis  and  comparative  inventories.     Certain  defi- 
nite times  should  be  set  aside  for  meetings  to  discuss  all  such 
reports,  and  it  should  always  be  borne  in  mind  that  the  object  of 
such  meetings  is  to  find  out  what  conditions  are  revealed  by  the 
reports  based  upon  records,  and  what  actions  should  be  taken  as  a 
result  of  the  revealing  of  these  conditions. 

412.  Apprenticeship  Systems. — I  come  now  to  the  most  impor- 
tant as  well  as  the  most  neglected  of  all  opportunities  in  connection 
with  good  management,  namely,  the  apprenticeship  system. 

There  is  no  gainsaying  the  fact  that  the  manufacturing  trades 
do  not  get  their  fair  percentage  of  bright,  ambitious,  and  serious- 
minded  boys.  The  reason  for  this  is  that  the  boys  are  neglected, 
and  far  too  often  have  to  work  in  unsanitary  and  unnecessarily 
dirty  surroundings,  so  that  the  most  self-respecting  are  attracted 
by  opportunities  to  enter  mercantile  pursuits  whose  managers 
seem  to  give  more  attention  to  the  selection  and  developing  of 
boys  they  hire  than  is  the  case  with  manufacturers. 


PRINCIPLES  UNDERLYING  GOOD  MANAGEMENT       365 

Each  apprentice  should  have  a  certain  course  laid  out,  at 
least  tentatively,  when  he  starts  in.  This  course  need  not  and 
cannot  be  the  same  for  each  apprentice.  In  fact,  it  will  probably 
have  to  be  varied  from  time  to  time  during  his  apprenticeship  as 
close  attention  to  him  and  his  work  reveals  what  are  his  best 
aptitudes.  The  old  catch  phrase,  "We  aren't  running  an  edu- 
cational institution,"  which  is  told  the  apprentice  boy  all  too  often, 
will  have  to  be  retired  if  manufacturers  want  good  apprentices, 
for  that  is  exactly  what  they  will  have  to  make  of  their  appren- 
ticeship system — an  "  educational  institution."  The  boy  cannot 
be  taught  too  much  about  the  business  during  his  apprenticeship 
years,  and  the  teachers  cannot  be  any  too  good.  Talks  during 
working  hours  by  the  very  best  men  in  each  department,  with 
demonstrations,  as  well  as  individual  instruction,  will  result  in 
advantage  to  the  employer  who  uses  such  systems. 

413.  Industrial  and  Vocational  Education -Continuation 
Schools. — There  is  much  talk  nowadays  of  extension  work  in  the 
way  of  the  higher  technical  state  institutions  reaching  out  into 
the  industries  and  teaching  the  employees,  and  of  continuation 
schools  in  which  the  students  who  have  had  only  six  or  seven 
years  of  public  school  life  are  given  the  benefits  of  further  training 
as  part  of  the  regular  public  common-school  system.  The  sooner 
this  talk  materializes  into  actual  accomplishment  the  better, 
since  such  work  will  result  not  only  in  better  intelligence  among 
the  workers,  but  in  better  habits  and  cleaner  manhood.  An 
employer  can  well  afford  to  allow  his  apprentices  to  have  an  hour 
a  day  on  pay  to  attend  continuation  school  for  the  sake  of  making 
them  better  citizens,  and  he  can  afford  to  add  to  this  hour  another 
hour  of  technical  instruction  during  the  daytime.  Whether  this 
technical  instruction  is  a  sort  that  can  be  given  in  extension  work 
by  a  state  technical  institution,  or  whether  it  must  be  so  special- 
ized that  it  will  require  a  teacher  from  the  staff  of  the  company 
itself,  will  depend  wholly  on  the  nature  of  the  industry.  Natu- 
rally it  would  be  cheaper,  where  the  number  of  apprentices  are 
limited,  and  the  technical  branches  are  such  as  can  be  taught  in 
general  classes,  to  allow  the  students  to  attend  extension  classes, 
supported  by  either  state,  municipal,  or  employers'  association 
funds,  than  to  attempt  to  run  a  private  school. 

The  day  schools  have  been  found  to  accomplish  definite  results 
in  a  far  better  manner  than  night  schools.  When  the  school 
session  is  in  the  day,  the  boy  can  prepare  his  work  at  night,  whereas 
with  night  school  he  has  no  time  for  such  preparation. 


366      FACTORY  ORGANIZATION  AND  ADMINISTRATION 

To  a  lesser  extent  the  neglect  of  the  apprentice  boy  has  its 
parallel  in  the  neglect  of  the  technical  school  and  college  graduate 
in  special  apprenticeship  courses.  A  few  of  the  larger  electrical 
corporations  are  doing  excellent  work  in  giving  systematic  instruc- 
tion to  this  class  of  apprentices,  with  excellent  results  in  their 
own  favor,  and  their  example  could  well  be  followed  quite 
generally. 

414.  Bureaus  of  Vocational  Guidance. — A  number  of  our  large 
cities  have  begun  to   establish  bureaus  of  vocational  guidance 
whose  purpose  is  to  gather  scientific  data  on  the  qualifications  of 
individuals  best  fitted  for  certain  occupations,  and  of  the  occupa- 
tions best  fitted  to  individuals  showing  certain  physical  and 
psychological    combinations.     Such    bureaus    should    be    under 
the  leadership  of  men  with  industrial  experience,  liberal  education, 
and  broad  human  interests.     In  the  large  cities  the  directors  of 
such  bureaus  should  be  provided  with  capable  specialists  as 
assistants  to  conduct  the  psychologic  and  medical  examinations, 
prepare  the  economic  and  statistical  records,  and  conduct  the 
clerical  work.     In  the  smaller  industrial  centers,  the  superintend- 
ent of  schools  should  be  aided  by  specialists  from  the  state  col- 
leges and  universities  assigned  to  such  extension  work,  in  starting 
proper  systems  of  vocational  guidance. 

415.  Educational  Activities  must  not  be  Hampered  by  Fac- 
tional Influence  brought  to  bear  by  Organized  Business  or  Organ- 
ized Labor. — H.  L.  Gantt  states  that  "Our  difficulty  has  been 
mainly  with  the  commercial  man,  who  often  seems  incapable  of 
considering  anybody's  interest  except  his  own,  and  has  not  yet 
recognized  that  the  prosperity  of  all  is  directly  helped  by  the  pros- 
perity of  each.     As  yet  he  has  no  idea  of  what  real  co-operation 
means.     His  idea  of  co-operation  is  that  of  the  pack  or  the  herd, 
whose  co-operation  is  for  attack  or  defense.     Certain  well-known 
leaders  of  manufacturing  and  labor  organizations  respectively  are 
prominent  public  advocates  of  this  kind  of  co-operation,  which 
aims  to  despoil  the  outsiders  for  the  benefit  of  those  in  the  ring." 
Those  leaders  in  industrial  education  who  are  earnestly  striving 
for  the  benefit  of  all,  are  seriously  handicapped  by  the  activities 
of  the  representatives  of  labor  and  employers'  organizations  on 
the  one  hand  and  the  old-school  advocates  of  education  for  cul- 
ture only  on  the  other.     The  employer  frequently  wishes  indus- 
trial and  vocational  education  to  be  an  immediate  tool  for  break- 
ing up  trades  unionism,  and  will  lobby  strongly  for  men  who  are  in 


PRINCIPLES  UNDERLYING  GOOD  MANAGEMENT       367 

sympathy  with  this  attitude.  The  labor  union  leader  frequently 
will  oppose  in  educational  work  any  man  who  has  been  identi- 
fied with  scientific  management  or  efficiency  movements,  and 
will  oppose  any  system  of  industrial  education  which  in  his  opin- 
ion aims  to  give  training  which  should  be  given  by  members  of  the 
trade  to  a  limited  number  of  apprentices.  The  classicist  demands 
cultural  subjects  first  and  will  not  recognize  culture  in  most 
modern  practical  industrial  and  vocational  training.  Between 
these  three  mutually  opposing  influences  the  educator  who  is 
timid  and  under-paid  and  afraid  of  arousing  hostile  influences, 
is  frequently  in  a  dilemma  in  which  he  needs  the  support  of  civic 
organizations  which  are  thoroughly  non-partisan. 

416.  Some  Examples  of  Good  Apprenticeship  Systems. — 
The  Baldwin  Locomotive  Works  have  conducted  three  dis- 
tinct classes  of  apprentices  for  a  number  of  years,  and  as  their 
system  has  been  eminently  successful  an  outline  of  it  is  appended : 

BALDWIN  LOCOMOTIVE  WOKKS 

BURNHAM,  WILLIAMS  &  CO. 

PHILADELPHIA 

Apprenticeship  System 

In  recent  years  manufacturing  has  tended  so  largely  toward 
specialization  that  young  men  apprenticed  to  mechanical  trades 
have  been  able  in  most  cases  only  to  learn  single  processes,  and, 
as  a  result,  the  general  mechanic  has  threatened  to  become  prac- 
tically extinct,  to  the  detriment  of  manufacturing  interests  gener- 
ally. In  view  of  this  fact  the  Baldwin  Locomotive  Works  have 
established  a  system  of  apprenticeship  on  a  basis  adapted  to 
existing  social  and  business  conditions. 

Apprentices  are  taken  in  three  classes,  as  follows: 

Apprentices  of  the  First  Class 

The  first  class  will  include  boys  seventeen  years  of  age,  who 
have  had  a  good  common-school  education,  and  who  will  bind 
themselves  by  indentures  (with  the  consent  of  a  parent  or  guar- 
dian in  each  case)  to  serve  for  four  years;  to  be  regular  at  their 
work;  to  obey  all  orders  given  them  by  the  foreman  or  others  in 
authority;  to  recognize  the  supervision  of  the  firm  over  their 


368      FACTORY  ORGANIZATION  AND  ADMINISTRATION 

conduct  out  of  the  shop  as  well  as  in  it;  and  to  attend  such  night 
schools  during  the  first  three  years  of  their  apprenticeship  as  will 
teach  them,  in  the  first  year,  elementary  algebra  and  geometry; 
and  in  the  remaining  two  years,  the  rudiments  of  mechanical 
drawing. 

Apprentices  of  the  Second  Class 

The  second-class  indenture  is  similar  to  that  of  the  first  class, 
except  that  the  apprentice  must  have  had  an  advanced  grammar- 
school  or  high-school  training,  including  the  mathematical  courses 
usual  in  such  schools.  He  must  bind  himself  to  serve  for  three 
years,  and  to  attend  night  schools  for  the  study  of  mechanical 
drawing  at  least  two  years,  unless  he  has  already  sufficiently 
acquired  the  art. 

Apprentices  of  the  Third  Class 

The  third-class  indenture  is  in  the  form  of  an  agreement  made 
with  persons  twenty-one  years  of  age  or  over,  who  are  graduates 
of  colleges,  technical  schools,  or  scientific  institutions,  having 
taken  courses  covering  the  higher  mathematics  and  the  natural 
sciences,  and  who  desire  to  secure  instruction  in  practical  shop 
work. 

The  indentures  or  agreement  in  each  case  place  upon  the 
firm  the  obligation  to  teach  the  apprentice  his  art  thoroughly  and 
to  furnish  him  abundant  opportunity  to  acquire  a  practical 
knowledge  of  mechanical  business.  The  firm  is  also  bound  to 
retain  the  apprentice  in  service  until  he  has  completed  the  term 
provided  for  in  the  indenture  or  agreement,  provided  his  services 
and  conduct  are  satisfactory.  In  all  cases  the  firm  reserves  the 
right  to  dismiss  the  apprentice  for  cause. 

The  rates  of  pay  in  the  different  classes  have  been  adjusted 
from  time  to  time  in  accordance  with  prevailing  wage  con- 
ditions. In  general  the  practice  has  been  followed  of  making 
a- semi-annual  increase  of  pay  in  each  class. 

In  addition  to  the  regular  rates  of  pay,  apprentices  of  the 
first  class  each  receive  an  additional  sum  of  $125,  and  apprentices 


PRINCIPLES  UNDERLYING  GOOD  MANAGEMENT       369 

of  the  second  class  an  additional  sum  of  $100,  at  the  expiration 
of  their  full  term  of  apprenticeship  respectively. 

By  the  course  of  training  provided  for  in  this  system  it  is 
believed  that  a  great  benefit  will  accrue  to  the  mechanic  as  well 
as  to  the  employer.  To  young  men  who  have  received  a  thor- 
ough technical  education,  the  two  years'  course  in  shop  work 
is  especially  recommended. 

Further  particulars  will  be  given  on  application. 

The  Westinghouse  industries  in  the  vicinity  of  East  Pitts- 
burg  have  carried  on  extension  and  continuation  work  to  a  con- 
siderable extent.  Following  is  an  outline  of  their  work  which 
was  given  by  Mr.  C.  R.  Dooley  (who  is  in  charge  of  the  educational 
division  of  the  apprenticeship  department  of  the  Westinghouse 
Electric  and  Manufacturing  Company) ,  in  a  paper  read  before  the 
American  Institute  of  Electrical  Engineers  in  June,  1909 : 

The  educational  activities  in  the  vicinity  of  the  Westinghouse 
interests  at  East  Pittsburg  divide  themselves  into  two  general 
classes:  1.  The  training  of  the  graduates  of  engineering  schools. 
2.  The  training  of  non-technical  men.  The  training  of  non- 
technical men  is  further  divided  into  two  distinct  lines:  1.  The 
apprenticeship  system,  which  includes  a  certain  amount  of  sys- 
tematic class  instruction  given  during  working  hours.  2.  The 
night  school,  where  attendance  is  purely  voluntary.  Both  of 
these  have  a  place  in  the  training  of  non-technical  men. 

The  Apprenticeship  System. — In  the  shop  a  certain  section 
is  devoted  to  the  apprentices.  This  section  is  fitted  with  a  com- 
plete equipment  to  furnish  shop  practice  in  all  branches  of  the 
machinists'  trade.  The  boys  are  under  the  guidance  of  all- 
around  mechanics  taken  from  the  shop  organization  and  chosen 
for  their  interest  in  young  men  as  well  as  for  their  skill  as  workmen. 
The  boys  remain  in  this  section  approximately  two  years.  The 
latter  half  of  their  course  is  spent  in  the  various  sections  of  the 
shop. 

The  class-room  instruction  is  provided  on  the  company's 
time,  and  is  conducted  throughout  the  four  years  of  the  course. 
Special  rooms  inside  the  works  have  been  fitted  up  with  suitable 
tables,  desks,  blackboards,  etc.,  much  the  same  as  in  an  ordinary 
schoolroom.  The  atmosphere  is  hardly  that  of  a  school,  but 
rather  that  of  a  class  where  the  boys  are  given  problems  and 
explanations  concerning  the  things  with  which  they  work  every 
day,  instead  of  problems  in  abstract  mathematics.  In  connec- 

24 


370      FACTORY  ORGANIZATION  AND  ADMINISTRATION 

tion  with  the  character  of  the  class  work,  there  are  three  vital 
points:  1.  The  scientific  principles  underlying  the  subjects  must 
be  taught.  2.  The  scientific  principles  can  best  be  presented 
through  the  working  of  practical  problems  dealing  with  the 
things  of  the  boy's  every-day  life.  3.  The  same  problem  must 
teach  him  certain  facts  and  specific  knowledge  concerning  the 
things  with  which  he  is  working,  such  as  weights,  costs,  and 
strength  of  materials,  gear  speeds,  pulley  and  belt  speeds,  etc. 
In  fact,  a  knowledge  of  the  things  with  which  the  problems  deal 
and  the  facility  afforded  for  thinking  about  these  very  ordinary 
things  may  be  the  most  valuable  feature  of  this  instruction. 

There  is  another  phase  of  the  work  without  which  all  else  will 
fail.  For  want  of  a  better  name,  we  call  it  spirit.  It  includes 
loyalty  and  enthusiasm,  not  only  in  the  work  and  the  future  it 
holds  for  the  boys,  but  also  in  all  their  daily  relations  with  their 
fellows — a  spirit  of  service  and  willingness,  confidence  in  all 
things  and  all  people,  and  eternal  optimism. 

The  Technical  Night  School. — Some  years  ago  a  technical  night 
school  was  started  in  the  vicinity  of  the  manufacturing  interests 
at  East  Pittsburg.  Its  management  is  independent  of  any  com- 
mercial industry,  though  its  activity  is  encouraged  and  fostered 
by  the  local  organizations,  including  the  public  school  board, 
the  latter  furnishing  the  building.  In  the  beginning  there  were 
half  a  dozen  teachers  and  a  few  dozen  students  who  attended 
classes  in  drawing,  elementary  mathematics,  and  shop  practice. 
At  present  there  is  offered  an  opportunity  for  systematic  study 
in  such  fundamentals  as  mathematics,  mechanical  drawing,  me- 
chanics, physics,  theoretical  and  applied  electricity,  chemistry, 
shop  practice  in  both  wood  and  metal,  theoretical  and  applied 
steam  engineering,  etc.  There  is  a  faculty  of  twenty-five  instruct- 
ors and  an  enrolment  of  about  three  hundred  students.  The 
instructors  are  not  only  versed  in  the  theory  of  their  respective 
subjects,  but  each  is  also  actively  engaged  during  the  day  with 
his  subject  within  the  organization  of  a  commercial  factory.  The 
opportunities  for  obtaining  exceptionally  trained  teachers  are 
therefore  ideal. 

Attendance  is  voluntary,  and  a  small  tuition  fee  is  charged. 
Admission  is  extended  to  all,  regardless  of  occupation  or  previous 
education.  The  low  educational  entrance  qualifications  are  cared 
for  by  a  preparatory  department.  Practically  all  of  the  students 
are  employed  in  the  various  shops  in  this  vicinity.  Of  the  forty- 


PRINCIPLES  UNDERLYING  GOOD  MANAGEMENT       371 

five  men  who  have  been  graduated  during  the  past  three  years, 
practically  all  have  been  steadily  advanced  in  position  and  re- 
ponsibility,  and  forty  are  still  with  their  original  employers. 
Some  of  the  students  are  doing  high-grade  engineering  work  in  the 
engineering  department  and  in  the  drafting  office  of  the  nearby 
electrical  manufacturing  company.  Others  are  successful  sales- 
men and  many  are  doing  responsible  work  in  the  erection  depart- 
ment and  in  the  shop  organization. 

The  engineering  night  school  has  a  large  field  of  activity. 
At  the  start  its  students  have  a  clear  idea  of  commercial  practice 
such  as  is  seldom  possessed  by  the  newly  graduated  college  stu- 
dent. This  early  experience  instils  an  appreciation  of  the  value 
of  time  and  of  scientific  training  that  tends  to  produce  the  most 
efficient  student.  They  have  learned  several  years  earlier  in 
life  than  the  college  student  that  scientific  study  and  commercial 
practice  not  only  go  hand  in  hand,  but  that  they  should  continue 
hand  in  hand  throughout  life,  if  the  highest  achievements  are  to 
be  attained;  that  there  never  comes  a  time  when  the  one  can  be 
laid  aside  and  the  other  taken  up.  They  also  know  the  impor- 
tance of  the  routine  of  life,  that  from  the  office  boy  to  the  presi- 
dent, it  is  the  fellow  who  gets  the  job  done  that  gets  the  bigger 
job  to  do. 

417.  Co-operative  Schools. — An  account  of  educational 
activities  engaged  in  by  manufacturers  would  be  incomplete  with- 
out mention  being  made  of  the  co-operative  work  first  initiated  by 
the  University  of  Cincinnati  under  the  direction  of  Dean  Her- 
mann Schneider.  In  this  plan  students  prepared  to  enter  the 
university  are  taken  into  the  machine  shops  by  the  owners  of  the 
shops.  The  students  spend  alternate  weeks  in  the  shops  and 
alternate  weeks  in  the  university.  While  in  the  shops  they  are 
visited  by  university  instructors  designated  as  co-ordinators,  who 
note  what  they  are  working  on,  how  they  are  doing  it,  and  any 
other  points  of  educational  value  in  their  surroundings,  and  dis- 
cuss them  in  a  class  devoted  to  this  purpose  during  the  week  that 
they  are  attending  the  university.  The  course  covers  five  years, 
eleven  months  of  each  year  being  put  in  during  alternate  weeks 
at  the  university,  the  remainder  of  the  time  being  in  the  shops  as 
regular  workmen.  The  employers  are  thoroughly  satisfied  with 
the  plan  and  state  that  it  develops  men  who  do  not  have  the 
handicap  of  inability  to  conform  to  shop  discipline,  and  ignorance 
of  shop  methods,  which  characterized  a  considerable  percentage  of 


372      FACTORY  ORGANIZATION  AND  ADMINISTRATION 

their  university  graduate  apprentices  formerly.  The  plan  has 
also  been  adopted  at  the  Fitchburg,  Mass.,  and  York,  Pa.  high 
schools  and  at  the  Lewis  Institute  of  Technology  in  Chicago  in 
co-operation  with  members  of  the  National  Metal  Trades 
Association. 

418.  Employment  of  Industrial  Engineers  in  an  Advisory 
Capacity. — It  must  be  quite  apparent  to  the  progressive  manu- 
facturer who  has  followed  the  development  of  industrial  engi- 
neering and  scientific  management,  that  most  of  the  work  of 
factory  planning,  equipping  and  organizing  requires  exceptional 
experience  and  training.  Most  ability  of  this  sort  is  one-man 
ability  and  cannot  be  syndicated.  As  soon  as  we  have  expert 
service  of  this  sort  take  the  corporate  form  with  a  large  force  of 
assistants,  it  means  that  the  service  is  of  the  mimeographed, 
ready-made,  correspondence-school  standard.  The  personal 
servic'es  of  a  well-educated  well-trained  mature  expert  at  $100  a 
day  and  upward  plus  traveling  expenses  are  frequently  cheaper  in 
the  long  run  than  syndicated  expert  services  at  lower  prices. 

REFERENCES 

BRISCO:  "Economics  of  Business,"  Chapter  IV. 

DODGE:  "The  Spirit  in  Which  Scientific  Management  Should  be  Ap- 
proached," Tuck  School  Conference  Report. 

CARPENTER:  "Profit-making  Management,"  Chapter  XIV. 

REDFIELD:  "The  New  Industrial  Day,"  Chapters  VI-X. 

LODGE:  "Rules  of  Management." 

GANTT:  "Work,  Wages  and  Profits,"  Chapter  IX. 

CARLTON:  "Education  and  Industrial  Evolution,"  Chapters  I-IV  and 
VII-XII  inclusive. 

DAY:  "Industrial  Plants,"  Chapter  XII. 

BASSETT:  "When  the  Workmen  Help  You  Manage." 

COHEN:  "An  American  Labor  Policy." 

STODDARD:  "The  Shop  Committee." 

GANTT:  "Organizing  for  Work." 

COMMONS:  "Industrial  Goodwill." 

LEITCH:  "Man  to  Man — The  Story  of  Industrial  Democracy." 


CHAPTER  XXVIII 
A  BIBLIOGRAPHY  OF  WORKS  MANAGEMENT 

419.  Reading  and  Study  Necessary  for  the  Man  Who  Aspires 
to  Success  in  Business  Administration  and  Industrial  Man- 
agement.— The  application  of  scientific  methods  to  the  in- 
vestigation of  problems  of  factory  management  has  resulted  in 
the  accumulation  of  a  bibliography  of  considerable  extent  having 
to  do  wholly  with  these  questions.  Fundamental  prerequisites 
or  accompaniments  to  the  study  of  such  a  bibliography  are  the 
three  branches  of  learning  in  which  he  who  would  train  himself 
for  the  profession  of  works  management  should  be  thoroughly 
grounded,  namely,  engineering,  industrial  economics  and  in- 
dustrial psychology.  It  is  noteworthy  that  the  authors  of  the 
works  hereafter  referred  to  have  been,  almost  without  exception, 
engineers,  who  have  added  to  their  technical  training  and 
experience  the  essential  knowledge  of  accounting,  psychology, 
and  economics,  requisite  to  a  comprehensive  grasp  of  the  problems 
of  factory  management. 

The  ambitious  engine  tender  has  at  hand  several  works  of 
more  or  less  merit  on  the  steam-engine.  He  is  a  subscriber  to 
some  technical  or  trade  paper  from  which  he  gains  advice  and 
inspiration.  The  same  is  true  of  the  first-class  pattern-maker 
and  draftsman,  and  of  any  high-grade  craftsman.  The  chief 
engineer  and  the  master  mechanic  of  a  large  industrial  establish- 
ment usually  have  at  hand  a  supply  of  high-class  works  of  refer- 
ence. It  seems  singular  that  the  same  should  not  be  true  of 
commercial  managers,  or  of  engineers  who  have  been  drawn  into 
positions  of  works  management.  To  be  sure,  the  literature  of 
factory  economics  is  not  abundant.  Yet  there  have  been  some 
very  good  works  published.  A  reading  knowledge  of  some  of 
these  works  would  be  of  great  value  to  managers  and  their  assist- 
ants in  charge  of  departments.  Such  a  knowledge  might  often 
result  in  the  anticipation  of  plans  and  methods  which  would  other- 
wise require  years  to  mature.  That  this  is  true  is  evidenced  by  the 
frequent  reproduction,  in  the  most  elementary  form,  of  methods 

374 


A  BIBLIOGRAPHY  OF  WORKS  MANAGEMENT          375 

thought  new  and  original  by  those  introducing  them,  when  in 
fact  the  same  methods  have  been  far  more  completely  worked  out 
by  others.  A  similar  ignorance  of  current  practice  and  of  best 
methods  on  the  part  of  the  mechanical  and  engineering  depart- 
ment heads  would  be  considered  unpardonable. 

420.  A  Business  or  Shop  Library  for  Managers  and  Employees. 
— A  certain  evidence  of  the  lack  of  reading  along  these  lines 
by  those  who  might  profit  therefrom  is  the  ease  with  which  an 
unscrupulous  man  who  has  made  himself  familiar  with  the  litera- 
ture of  works  management  is  able  to  palm  off,  as  originated  by 
himself,  charts,  tables,  and  forms,  and  sometimes  pages  of  dis- 
cussion, copied  verbatim  from  standard  works.  It  certainly 
would  be  a  profitable  investment  for  many  a  manufacturing 
corporation  to  provide  a  reference  library  of  such  standard  works 
as  would  be  of  particular  application  to  and  bear  upon  the  busi- 
ness concerned,  and  to  encourage  the  employees  to  make  use  of 
this  reference  library  in  working  hours  for  reference,  and  out  of 
working  hours  for  education. 

A.  S.  M.  E.  Papers. — There  are  certain  papers  presented  before 
the  American  Society  of  Mechanical  Engineers  which  may 
justly  be  termed  classics  in  industrial  management.  Most  of 
these  have  been  reprinted  by  the  society  and  can  be  purchased  in 
pamphlet  form.  The  entire  series  should  be  bound  together 
into  a  single  volume  for  convenience  in  handling  and  to  prevent 
wear  and  tear.  These  papers  are  as  follows : 

Vol.  X,  Paper  No.  CCCXLI.—"Gain  Sharing,"  a  paper  by 
Henry  R.  Towne,  presented  at  the  May,  1889,  meeting  of  the 
American  Society  of  Mechanical  Engineers. 

This  paper,  and  several  others,  will  be  listed  among  the  books 
reviewed,  since  these  papers  well  deserve  the  name  of  classics. 

"  Webster  defines  profit  as  excess  of  value  over  cost,  and  gain 
as  that  which  is  obtained  as  an  advantage.  I  have  availed  of 
this  well-expressed  though  delicate  distinction  between  the  two 
terms,  to  coin  a  name  for  the  system  herein  described,  whereby 
to  differentiate  it  from  profit-sharing  as  ordinarily  understood 
and  practised.  The  right  solution  of  this  problem  will  manifestly 
consist  in  allotting  to  each  member  of  the  organization  an  interest 
in  that  portion  of  the  profit  fund  which  is  or  may  be  affected  by 
his  individual  efforts  or  skill,  and  in  protecting  this  interest  against 
diminution  resulting  from  the  errors  of  others  or  other  extraneous 
causes  not  under  his  control.  Such  a  solution,  while  not  simple, 


376     FACTORY  ORGANIZATION  AND  ADMINISTRATION 

is  attainable  under  many  circumstances,  and  attainable  by 
methods  which  experience  has  shown  to  be  both  practical  and 
successful." 

The  plan  advocated  by  Mr.  Towne  is  the  differentiating  of 
all  items  affecting  cost  of  production  over  which  the  operatives 
have  any  control  whatever,  and  offering  the  operatives  a  share, 
say  one-half,  of  any  reduction  per  unit  of  product  that  they 
may  be  able  to  bring  about  in  these  items  in  the  course  of  a  year. 
Foremen  and  other  responsible  heads  are  to  receive  a  larger  pro- 
rata  share  of  the  saving  effected  than  the  rank  and  file. 

Mr.  Towne  presents  tables  showing  the  operation  of  the  system 
for  two  years  at  the  Yale  and  Towne  Works.  It  is  interesting  to 
note  that  the  company  has  discontinued  the  plan. 

The  discussion  by  Mr.  E.  F.  C.  Davis  is  the  first  record  pub- 
lished of  the  so-called  premium  plan.  He  cites  an  instance  of  a 
friend  of  his  who  announced  to  his  workmen  that  he  would  allow 
a  definite  number  of  hours  to  do  a  certain  machine-shop  job, 
and  that  of  any  time  the  workman  saved  over  that  he  would 
get  one-half  the  benefit.  Mr.  Davis  stated  that  after  the  work- 
men found  that  the  offer  was  really  made  in  good  faith,  the  plan 
worked  very  well. 

Vol.  XVI,  Paper  No.  DCXLVII.—"A  Piece-rate  System"  by 
Fred  W.  Taylor,  a  paper  presented  at  the  June,  1895,  meeting  of 
the  American  Society  of  Mechanical  Engineers. 

In  this  paper,  Mr.  Taylor  presents  the  first  recorded  recom- 
mendations in  favor  of  a  careful  or  scientific  study  of  the  subject 
of  rate-fixing,  and  of  the  differential  piece  rate.  Piece-work 
prices  based  on  elementary  rate-fixing  differ  from  such  prices  as 
usually  made,  in  that  a  careful  study  is  made  of  the  elemental 
times  required  to  do  each  of  the  constituent  steps  into  which  the 
manufacturing  operations  of  an  establishment  may  be  analyzed. 
These  elementary  operations  are  then  classified,  recorded,  and 
indexed,  and  when  a  piece-work  price  is  wanted  for  work,  the 
job  is  first  divided  into  its  elementary  operations,  and  the  total 
time  for  the  job  is  summed  up  from  these  elementary  data. 

The  differential-rate  system  of  piece  work  consists  of  the  offer- 
ing of  two  different  rates  for  the  same  job — a  high  price  per  piece 
in  case  the  work  is  finished  in  the  shortest  possible  time  and  in 
perfect  condition,  and  a  lower  price  per  piece  if  it  takes  a  longer 
time  to  do  the  job,  or  if  there  are  any  imperfections  in  the  work. 

Mr.  Taylor  expresses  it  as  his  opinion,  based  on  extensive 


A  BIBLIOGRAPHY  OF  WORKS  MANAGEMENT          377 

experience,  that  the  workmen  in  nearly  every  trade  can  and  will 
materially  increase  their  present  output  per  day,  providing  they 
are  assured  of  a  permanent  larger  return  for  their  time  than  they 
have  been  receiving,  and  that  employers  can  well  afford  to  pay 
higher  wages  per  piece,  even  permanently,  provided  each  man 
and  machine  in  the  establishment  turns  out  a  proportionately 
larger  amount  of  work. 

The  most  formidable  obstacle  to  the  solution  of  the  piece- 
work problem,  Mr.  Taylor  states,  is  the  lack  of  knowledge  of  the 
quickest  time  in  which  each  piece  of  work  can  be  done,  the  remedy 
for  this  lying  in  the  establishment  in  every  factory  of  a  proper 
rate-fixing  department. 

In  closing  the  discussion  of  his  paper,  Mr.  Taylor  expressed 
regret  that  the  elementary  rate-fixing  features  of  the  system  he 
described  did  not  receive  more  attention  by  the  members  dis- 
cussing his  paper,  and  stated  it  as  his  firm  conviction  that  this 
question  must  occupy  more  and  more  of  the  attention  of  manu- 
facturers in  the  future. 

This  paper  of  Mr.  Taylor's,  together  with  his  later  and  exhaust- 
ive one  delivered  at  the  June,  1903,  meeting  (an  abstract  of  which 
is  given  in  this  bibliography),  deserve  the  most  careful  perusal  of 
every  manufacturer. 

Vol.  XXIII,  Paper  No.  928. — "A  Bonus  System  of  Rewarding 
Labor,"  a  paper  by  H.  L.  Gantt,  presented  at  the  December, 
1901,  meeting  of  the  American  Society  of  Mechanical  Engineers. 

The  paper  is  a  description  of  a  system  introduced  by  the  author 
into  the  machine  shop  of  the  Bethlehem  Steel  Company.  An 
instruction  card  is  made  out,  showing  in  detail  the  best  method 
(so  far  as  knowledge  and  experience  available  can  give  it)  of 
performing  each  of  the  elementary  operations  on  any  piece  of 
work,  specifying  the  tools  to  be  used,  and  setting  the  time  needed 
for  each  of  these  operations  as  determined  by  experiments.  The 
sum  of  these  times  is  the  total  time  needed  to  complete  the  piece 
of  work.  If  the  workman  accomplishes  all  the  work  assigned 
in  any  one  day  within  the  total  time  limits  specified,  he  is  paid  a 
definite  fixed  bonus,  in  addition  to  the  day  rate  which  he  always 
gets.  If  he  fails,  he  gets  simply  his  day  rate.  As  the  time  for 
each  detail  operation  is  specified  on  the  instruction  card,  the  work- 
man can  see  continually  whether  he  is  going  to  earn  his  bonus  or 
not.  If  he  finds  any  operation  which  cannot  be  done  in  the  time 
specified,  he  must  at  once  report  it  to  his  foreman.  If,  on  care- 


378     FACTORY  ORGANIZATION  AND  ADMINISTRATION 

ful  investigation  by  the  man  making  out  the  card,  the  work- 
man's statement  is  found  to  be  correct,  a  new  instruction  card 
is  made  out,  explaining  the  proper  method  of  working,  and  allow- 
ing the  proper  time 

The  foremen  also  receive,  in  addition  to  their  day  wages,  com- 
pensation proportional  to  the  number  of  their  men  who  earn  a 
bonus,  and  an  extra  compensation  if  all  of  their  men  earn  bonuses. 

"As  the  instruction  cards  are  made  out  by  a  skilful  man,  with  the 
records  at  hand,  they  invariably  prescribe  a  better  method  for  doing 
the  work  than  the  ordinary  workman  or  foreman  could  devise  on  the 
spur  of  the  moment.  ... 

"The  system  has  many  of  the  advantages  of  the  differential  piece- 
work method,  by  which  the  compensation  is  quite  large  for  the  maximum 
amount  of  work  obtainable.  Since  it  is  impossible  for  men  to  earn 
bonuses  when  their  machines  are  out  of  order,  an  automatic  punishment 
is  provided  for  breakdowns.  .  .  . 

"Considerable  training  is  necessary  to  teach  the  men,  who,  as  a  rule, 
are  ordinary  laborers,  to  follow  the  instruction  cards.  Having  once 
given  them  this  training,  however,  the  advantage  of  having  a  first-class 
machinist  to  do  the  thinking,  and  to  use  for  them  the  best  results  already 
obtained,  produces  an  efficiency  which  would  be  absolutely  impossible 
if  the  workmen  were  left  to  themselves." 

Samples  of  the  forms  used  are  given,  as  filled  out  in  actual  use. 
The  author  states: 

"If  we  have  a  thorough  knowledge  of  all  the  conditions,  and  are 
able  to  introduce  piece  work,  it  is  undoubtedly  to  be  preferred.  But 
we  must  remember  that  aside  from  the  great  injustice  of  it,  there  is 
nothing  so  demoralizing  as  cutting  piece  rates." 

The  bonus  system  carries  with  it  the  advantage  that  if  the 
time  allowance  is  too  easily  reached,  a  limit  is  nevertheless  set 
to  any  workman's  daily  gain,  which  can  never  be  more  than  the 
fixed  daily  bonus. 

Vol.  XXIV,  Paper  No.  1003— "Shop  Management,"  by 
Fred  W.  Taylor,  a  paper  presented  at  the  June,  1903,  meeting  of 
the  American  Society  of  Mechanical  Engineers. 

This  exhaustive  paper,  which  covers  150  pages  of  the  society's 
transactions,  is  a  record  of  some  twenty  years  of  genuine  research 
work  by  the  author.  The  compiler  of  this  bibliography  emphat- 
ically agrees  with  Mr.  Henry  R.  Towne  in  his  characterization  of 
this  paper  as  the  most  valuable  contribution  to  this  subject  which 


A  BIBLIOGRAPHY  OF  WORKS  MANAGEMENT          379 

has  yet  been  made.  As  stated  by  Mr.  Towne,  it  includes  so 
complete  a  review  as  to  constitute  almost  a  history.  It  is  clear- 
cut  and  comprehensive,  written  in  a  characteristic,  vigorous, 
clear  style. 

Mr.  Taylor  brings  out  again,  and  in  greater  detail  than  in  his 
former  paper  of  1895,  the  importance  of  scientific  time  study 
as  the  foundation  of  the  best  management.  In  addition  to  the 
more  detailed  description  of  scientific  rate-fixing,  the  other  new 
features  not  brought  out  in  his  previous  paper  referred  to  are 
the  use  of  the  " Instruction  Card"  to  accompany  any  system  of 
compensation,  whether  it  be  Mr.  Gantt's  bonus,  Mr.  Taylor's 
differential  piece  rate,  the  premium  method,  or  ordinary  piece 
rate;  also  the  system  of  functional  foremanship. 

Functional  management  consists  in  so  dividing  the  work  of 
management  that  each  man,  from  the  assistant  superintendent 
down,  shall  have  as  few  functions  as  possible  to  perform.  If 
practicable,  the  work  of  each  man  in  the  management  should 
be  confined  to  the  performance  of  a  single  leading  function.  As 
example  of  this  fuctional  management,  there  are  suggested  in 
the  factory  office,  the  man  in  charge  of  order  of  work  and  routing 
department,  the  one  in  charge  of  instruction-card  department, 
the  time  and  cost  clerk,  and  the  shop  disciplinarian,  these  four 
divisions  making  up  what  Mr.  Taylor  calls  the  "  planning  depart- 
ment." In  the  shop  itself  the  functional  foremanships  are  those 
of  "gang  boss,"  who  has  charge  of  the  preparation  of  all  work 
up  to  the  time  the  piece  is  set  in  the  machine,  including  the  selec- 
tion and  providing  of  jigs,  templates,  drawings,  etc.;  the  "speed 
boss,"  who  must  see  that  the  proper  cutting  tools  are  used,  that 
the  cuts  are  started  right,  and  that  the  best  speeds  and  feeds  are 
employed;  the  "inspector,"  who  is  responsible  for  the  quality  of 
the  work;  and  the  "repair  boss,"  who  sees  that  each  machine  is 
kept  clean  by  its  operator  and  free  from  rust  and  scratches,  and 
that  it  is  oiled  and  otherwise  properly  treated. 

Vol.  XXV,  Paper  No.  1010.— "Slide  Rules  for  the  Machine 
Shop,"  by  Carl  G.  Barth,  a  paper  presented  at  the  Dec.  1903 
meeting  of  the  American  Society  of  Mechanical  Engineers.  In 
this  paper  Mr.  Barth  describes  the  methods  to  be  undertaken  in 
securing  correct  feeds  and  speeds  and  other  matters  connected 
with  the  machine  tool  equipment  of  a  metal-working  industry. 
He  also  outlines  the  mathematical  theory  on  which  he  bases  the 
construction  of  his  slide  rules  by  the  use  of  which  an  experienced 


380     FACTORY  ORGANIZATION  AND  ADMINISTRATION 

machine-tool  operator  with  mental  capacity  to  understand  the 
slide  rule,  or  a  technically  trained  man  preparing  instruction  cards, 
can  determine  the  correct  gear  and  pulley  combination  to  use  in 
machining  a  given  piece. 

Vol.  XXVII  Index.— At  the  close  of  the  1906  volume  there  is 
an  index  of  all  papers  on  Works  Management  and  discussions  in 
the  transactions  of  the  society  up  to  that  date.  This  index  in- 
cludes reference  to  several  discussions  not  here  mentioned. 

Vol.  XXVIII,  Paper  No.  1119.—"  The  Art  of  Cutting  Metals, " 
by  Fred  W.  Taylor.  This  paper  should  be  read  and  reread  by 
every  foreman,  manager,  or  proprietor  of  an  industry  using 
machine  tools,  as  well  as  by  any  person  proposing  to  undertake 
the  fixing  of  time  standards  or  wage  rates  on  machine  tool 
work.  It  is  a  monumental  piece  of  research  work  that  has  seldom 
been  equalled  even  in  the  field  of  pure  science.  The  paper  is 
illustrated  by  a  large  number  of  charts,  tables  and  photographs 
illustrating  proper  cutting  angles,  feeds  and  speeds,  lubrica- 
tion, etc. 

Vol.  XXXIV,  Paper  No.  1378. — Report  of  Sub-committee  on 
Administration  on  the  Present  Status  of  the  Art  of  Industrial 
Management,  presented  at  the  December,  1912;  meeting  of  the 
Society.  The  report  of  the  committee  itself  is  excellent  and  in- 
dicates marked  progress  toward  the  formulating  of  definite  prin- 
ciples of  the  Science  of  Management.  Unfortunately  a  good  deal 
of  the  discussion  does  not  directly  bear  on  the  report  of  the  com- 
mittee but  is  a  repetition  of  matter  already  presented  to  the 
public  by  the  speakers. 

421.  A  Bibliography  of  the  Classical  or  Pioneer  Literature  of 
Works  Management  or  Industrial  Engineering  prior  to  1904.— 
In  the  Engineering  Magazine,  Vol.  XXVII,  No.  4,  July,  1904,  the 
author  of  this  text  reviewed  the  bound  volumes  and  A.  S.  M.  E. 
papers  published  up  to  that  time.     This  bibliography  included  a 
number  of  volumes  not  mentioned  in  the  present  edition  of  this 
work,  as  they  are  not  representative  of  present-day  practice. 
However  to  the  man  interested  in  the  historical  development  of 
the  subject  the  list  given  will  be  of  interest.     In  the  same  number 
of  the  Engineering  Magazine  immediately  following  the  paper 
just  referred  to,  is  a  complete  bibliography  of  the  periodical  lit- 
erature of  Industrial  Engineering  up  to  and  including  May,  1904. 

422.  A  Standard  Reference  Library  of  Industrial  Management 
and  Industrial  Engineering.— The  following  list  is  intended  to 


A  BIBLIOGRAPHY  OF  WORKS  MANAGEMENT  381 

include  such  works  as  the  progressive  industrial  corporation  should 
possess  and  encourage  its  employees  to  read : 

ALEXANDER  HAMILTON  INSTITUTE:    "Organization  and   Management," 
by  Lee  Galloway. 

BABCOCK:  "Taylor  System  in  Franklin  Management." 

BENTLEY:  "Corporate  F. nance  and  Accounting." 

BLACKFORD  AND  NEWCOMB:  "The  Job,  the  Man,  the  Boss.", 

BRANDEIS:  "Scientific  Management." 

BRISCO:  "Economics  of  Business." 

BR  sco:  "Econom'cs  of  Efficiency." 

BUNNELL:  "Cost  Keeping  for  Manufacturing  Plants." 

CARLTON:  "Education  and  Industrial  Evolution.' 

CARPENTER:  "Profit-making  Management." 

CHURCH:  "Expense  Burden." 

CHURCH:  "Production    Factors    in    Cost    Accounting    and    Works 
Management." 

CHURCH:  "Science  and  Practice  of  Management." 

COOK:  "Factory  Management." 

CONYNGTON:  "The  Modern  Corporation.  ' 

COWEE:  "Practical  Safety  Methods  and  Devices." 

DAY:  "Accounting  Practice." 

DAY:  "Industrial  Plants." 

DIEMER:  "Factory  Organization  and  Administration.' 

DICKSEE  AND  B  LAIN  I  "Office  Organization  and  Management." 

DICKSEE:  "Business  Organization." 

DUNCAN:  "The  Principles  of  Industrial  Management." 

DURELL:  "Fundamental  Sources  of  Erne  ency." 

EMERSON:  "Efficiency." 

EMERSON:  "Twelve  Principles  of  Efficiency." 

ENNIS:  "Works  Management." 

EVANS:  "Cost  Keeping  and  Scientific  Management." 

FICKES:  "Shop  Expense,  Analysis  and  Control." 

GALLOWAY:  "Organization  and  Management." 

GANTT:  "Work,  Wages  and  Profit." 

GILBRETH:  "Applied  Motion  Study." 

GILBRETH:  "Motion  Study." 

GILBRETH:  "Primer  of  Scientific  Management." 

GOING:  "Principles  of  Industrial  Engineering." 

HARTNESS:  "The  Human  Factor  in  Works  Management." 

HOXIE:  "Scientific  Management  and  Labor." 

KEMBLE:  "Choosing  Employees  by  Test." 

KNOEPPEL:  "Maximum  Production." 

LODGE:  "Rules  of  Management." 

LODGE:  "Shop  Rules." 

MATHESON:  "The  Depreciation  of  Factories." 

MUENSTERBERG:  "Psychology  and  Industrial  Efficiency." 

PARKHURST:  "Applied  Methods  of  Scientific  Management." 


382      FACTORY  ORGANIZATION  AND  ADMINISTRATION 

PARKHURST:  "Symbols." 

REDFIELD:  "The  New  Industrial  Day." 

SCHLOSS:  "Methods  of  Industrial  Remuneration." 

SCOTT:  "increasing  Human  Efficiency  in  Business." 

SHEPARD:  "Application  of  Efficiency  Principles." 

SULLIVAN:  "American  Corporations." 

TAYLOR:  "Shop  Management." 

TAYLOR:  "The  Art  of  Cutting  Metals." 

TAYLOR:  "The  Principles  of  Scientific  Management." 

THOMPSON:  "Scientific  Management." 

TUCK  SCHOOL:  "Conference  on  Scientific  Management." 

TWYFORD:  "Purchasing." 

TYRRELL:  "Engineering  of  Shops  and  Factories." 

WEBNER:  "Factory  Costs." 

The  above  list  includes  most  of  the  works  mentioned  as  supple- 
•mentary  reading  to  the  various  chapters  of  this  work  and  repre- 
sent an  up-to-date  private  or  company  library. 

423.  A  Comprehensive  Library  of  Supplementary  Reading 
for  a  School  of  Engineering  or  School  of  Business  Administration 
or  Public  Library. — The  following  list  is  in  addition  to  the  afore- 
mentioned works : 

Accounting  and  Cost-keeping. 

COLE:  "Accounts." 

HATFIELD:  "Modern  Accounting." 

RIDGWAY:  "Cost  Accounts." 

ARNOLD:  "The  Complete  Cost  Keeper.'1 

ARNOLD:  "The  Factory  Manager  and  Accountant." 

BENTLEY:  "The  Science  of  Accounts." 

GARCKE  AND  FELLS:  "Factory  Accounts." 

LISLE:  "Accounting  in  Theory  and  Practice." 

DICKSEE:  "Advanced  Accounting." 

KEISTER:  "Corporation  Accounting  and  Auditing." 

MOORE  AND  MINER:  "Accounting  and  Business  Practice." 

SOULE:  "New  Science  and  Practice  of  Accounts." 

MACKENZIE  ST.  CLAIR:  "The  Modern  Balance  Sheet." 

"The  Accountant's  Library."     Published  by  Gee  &  Sons,  London. 

"Cyclopedia  of  Accounting."     8  volumes.     Published  by  W.  Green  & 
Sons,  London. 

BROWN:  "History  of  Accounting  and  Accountants." 

"The    Accountant's  Manual."     Published  by  Gee  &  Sons,  London. 

DAWSON:  "The  Accountant's  Compendium." 

RENN:  "Practical  Auditing." 

J.  H.  GOODWIN:  "Bookkeeping  and  Business  Manual." 
Business  and  Engineering  Law. 

BURDICK:  " Essentials  of  Business  Law." 

PARSONS:  "Laws  of  Business." 

WAIT:  "Law  of  Operations  Preliminary  to  Construction." 


A  BIBLIOGRAPHY  OF  WORKS  MANAGEMENT  383 

BALL  :  ' '  The    Law  Affecting  Engineers. ' ' 

HARING:  "Engineering  Law." 

JOHNSON:  "Contracts  and  Specifications." 

BRENNAN:  "Handbook  of  Commercial  Law." 

SPENCER:    'Commercial  Law." 

SULLIVAN:  "American  Business  Law." 

TUCKER:  "Contracts  in  Engineering." 
Commercial  Geography. 

ADAMS:  "Commercial  Geography." 

CHESHOLM:  "Commercial  Geography." 

GREGORY:  "Physical  and  Commercial  Geography." 

MACFARLANE:  "Commercial  and  Industrial  Geography." 

MORRIS:  "Industrial  and  Commercial  Geography." 

TROTTER:  "The  Geography  of  Commerce." 
Economics  of  Workingmen. 

GUNTON:  "Wealth  and  Progress." 

UNION:  "Labor  Legislation,  Labor  Movements  and  Labor  Leaders." 

MARX:  "Wage  Labor  and  Capital." 

PETERS:  "Labor  and  Capital." 

Rus:  "How  the  Other  Half  Lives." 

ROBERTSON:  "The  Eight  Hours  Question." 

SCHOENHOF:  "The  Economy  of  High  Wages." 

SHAD  WELL:  "Industrial  Efficiency." 

SPAHR:  "America's  Working  People." 

HOBSON:  "Evolution  of  Modern  Capitalism." 

MALLOCK:  "Classes  and  Masses." 

COMMONS:  "Selected  Readings  on  Labor  Problems." 

WEBB:  "Industrial  Democracy." 

British  Royal  Commission  on  Labor.  Foreign  Reports.  (For  histor- 
ical account  of  social  efforts  at  amelioration  of  wage-earners'  condition 
in  different  countries.) 

British  Statutes  (such  as  Friendly  Societies  Acts,  Trade-Union  Acts, 
and  Workmen's  Compensation  and  Trades  Disputes  Acts  of  1906). 

Monographs  on  Labor  Legislation  in  several  States.  (Massachusetts, 
Pennsylvania.) 

TOYNBEE:  "Industrial  Revolution." 

ASHLEY:  "Adjustment  of  Wages." 

BOOTH:  "In  Darkest  England  and  the  Way  Out." 

CHAPMAN:  "Work  and  Wages." 

BRETANO:  "The  Relation  of  Labor  to  the  Law  of  To-day." 

DRAGE:  "The  Unemployed,  and  the  Problem  of  Aged  Poor." 

GILMAN:  "A  Dividend  to  Labor." 

SCHULZE,  GAEVERNITZ:  "Social  Peace." 

MITCHELL:  " Organized  Labor." 

ADAMS  AND  SUMNER:  "Labor  Problems,"  pp.  3-16,  502-547. 

LEVASSEUR:  "American  Workman,"  pp.  436-509. 

MITCHELL:  "Organized  Labor,"  pp.  391-411. 

"Twelfth  Census."     Special  Report  on  Employees  and  Wages,  p.  xcix. 

"National  Civic  Federation,  Industrial  Conciliation,"  pp.  40-48,  141- 
154,  238-243,  254-266. 

GLADDEN:  "Working  People  and  Their  Employers." 


384      FACTORY  ORGANIZATION  AND  ADMINISTRATION 

"Workmen's  Compensation,"  U.  S.  Dept.  Commerce  and  Labor. 
"Workmen's  Insurance  and  Compensation  Systems,"  U.  S.  Bureau  of 
Labor. 

ADAMS  &  SUMNER:  "Labor  Problems." 

CARLTON:  "The  Industrial  Situation." 

COMMONS:  "Industrial  Goodwill." 

GANTT:  "Industrial  Leadership." 

HARTNESS:  "The  Human  Factor  in  Works  Management." 

HOBSON:  "Work  and  Wealth." 

Karapetoff :  "The  Human  Side  of  the  Engineering  Profession." 

MYERS:  "Preventing  Losses  in  Factory  Power  Plants." 

REDFIELD:  "The  New  Industrial  Day." 
Employment  Management. 

BASSET:  "When  the  Workmen  Help  You  Manage." 

BLOOMFIELD:  "The  Vocational  Guidance  of  Youth." 

BRAY:  "Boy  Labor  and  Apprenticeship." 

CLOTHIER:  "Function  of  the  Employment  Department." 

COHEN:  "An  American  Labor  Policy." 

"Commissioner  of  Education  Reports,"  Washington,  D.  C. 

COMMONS:  "Industrial  Goodwill." 

COOLEY:  "Vocational  Education  in  Europe." 

DAVENPORT:  "Education  for  Efficiency." 

DAVIDSON:  "Education  of  the  Wage  Earner." 

DAVIS:  "Vocational  and  Moral  Guidance." 

DOFF:  "The  Place  of  Industries  in  Elementary  Education." 

GANTT:  "Organizing  for  Work." 

GILLETTE:  "Vocational  Education." 

HANUS:  "Beginnings  in  Industrial  Education." 

KELLY:  "Hiring  the  Worker." 

LEAKE:  "Industrial  Education." 

LEAVITT:  "Examples  of  Industrial  Education." 

LEITCH:  "Man  to  Man — The  Story  of  Industrial  Democracy." 

MAROT:  "Creative  Impulse  in  Industry  ,"  New  York,  1918. 

METROPOLITAN  LIFE  INSURANCE  Co.:  "Hiring  and  Firing,"  New  York, 
1918. 

National   Association   of  Corporation  Schools  Publications,   15th  St.   & 
Irving  PI.,  New  York  City. 

National  Society  for  Promotion  of  Industrial  Education,   140  W.  43rd 
St.,  New  York  City. 

PUFFER:  "Vocational  Guidance." 

ROBERTS:  "Manual  for  Teachers." 

ROBINSON:  "The  Wage  Earning  Boy."  • 

RUSSELL  SAGE  FOUNDATION:  "Boyhood  and  Lawlessness." 

SCHNEIDER:  "Education  for  Industrial  Workers." 

SNEDDEN:  "The  Problem  of  Vocational  Education." 

STOOD ARD:  "The  Shop  Committee." 

TAYLOR:  "Handbook  of  Vocational  Education." 

TEAD:  "Instincts  in  Industry." 

"U.  S.  Federal  Board  for  Vocational  Education  Bulletins." 


A  BIBLIOGRAPHY  OF  WORKS  MANAGEMENT  385 

TRAVIS:  "The  Young  Malefactor." 

U.  S.  Bureau  of  Labor  Bulletins,  Nos.  31,  54,  159  and  others. 
WARE:  "Educational  Foundations  of  Trade  and  Industry. 
WEAVER:  "Profitable  Vocations  for  Boys." 

WRIGHT:  "The    Apprenticeship  System  and  its  Relation  to  Industrial 
Education." 
Finance,  Banking,  and  Currency. 

ALDRICH:  "Money  and  Credit,"  Chapters,  I,  II,  V. 

BRYAN:  "Credit,  Its  Meaning  and  Moment." 

WALKER:  "Money." 

ZIMMERMAN:  "Credits  and  Collections." 

HEPBURN:  "Contest  for  Sound  Money." 

KINLEY:  "Money." 

JOHNSON:  "Money  and  Currency." 

LEWIS:  "The  Credit  Man  and  His  Work." 

PRESTON:  "Credits,  Collections,  and  Their  Management." 

WATSON:  "History  of  American  Coinage." 

DEWEY:  "Financial  History  of  the  United  States,"  pp.  34-59,  76-117, 

224-246,  252-262. 
CATTERALL:  "The  Second   Bank  of  the   United  States,"   pp.    1-24, 

63-119,  376  map,  402-403,  464-477. 
BULLOCK:  "Essays  on  the  Monetary  History  of  the  United  States," 

pp.  60-93. 
HAMILTON:  ''Reports  on  Public  Credit."  Amer.  State  Papers,  Finance, 

Vol.  I,  pp.  15-37,  64-76. 

KINLEY:  "History  of  the  Independent  Treasury,"  pp.  16-39. 
SUMMER:    "Andrew    Jackson"     (ed.    1886),    pp.    224-249,    257-276, 

291-342. 

Ross:  "Sinking  Funds,"  pp.  21-35. 
SCOTT:  "Repudiation  of  State  Debts,"  pp.  33-196. 
BOURNE:  "History  of  the  Surplus  Revenue  of  1837,"  pp.  1-42,  125-135. 
CONANT:  "History  of  Modern  Banks  of  Issue,"  pp.  3103-47. 
MITCHELL:  "  History  of  the  Greenbacks,"  pp.  3-43,  403-420. 
NOYES:  "Thirty   Years   of  American   Finance,"   pp.    1-72,    234-254 

(73-233). 

TAUSSIG:  "Silver  Situation  in  the  United  States,"  pp.  1-157. 
DUNBAR:  "National  Banking  System,"  Q.  J.  E.,  Vol.  XII,  pp.  1-26; 

printed  also  in  Dunbar's  "Economic  Essays,"  pp.  227-247. 
HOWE:  "Taxation  and  Taxes  in  the  United  States  under  the  Internal 

Revenue  System,"  pp.  136-262. 
"Tenth  United  States  Census  "  (1880),  Vol.  VIIjBayley,  "History  of  the 

National  Loans,-"  pp.  369-392,  444-486. 
WHITE:  "Money  and  Banking." 
TAYLOR:  "Chapters  on  Money." 
DUNBAR:  "Theory  and  History  of  Banking." 
Industrial  History  of  the  Ur.ited  States. 

COMAN:  "Industrial  History  of  the  United  States." 
TAUSSIG:  "Tariff  History." 

DEWEY:  "Financial  History." 
25 


386      FACTORY  ORGANIZATION  AND  ADMINISTRATION 

HART:  "American  History  as  told  by  Contemporaries,"  Vols.  Ill  and  IV. 

SEMPLE:  "American  History  and  its  Geographic  Conditions." 

BULLOCK:  "Selected  Readings  in  Economics." 

CAIRNES:  "The  Slave  Power." 

CALLENDER:  "Early  Transportation  and  Banking  Enterprises  in  rela- 
tion to  the  Growth  of  Corporation,"  in  Quarterly  Journal  of  Eco- 
nomics, Vol.  XVII. 

NOTES:  "Recent  Economic  History  of  the  United  States,"  in  Quarterly 
Journal  of  Economics,  Vol.  XIX. 

DAY:  "History  of  Commerce." 

HAMILTON:  "Report  on  Manufacturers,"  in  Taussig's  State  Papers  and 
Speeches  on  the  Tariff,  pp.  1-79,  103-107  (79-103). 

BOLLES:  "Industrial  History  of  the  United  States,"  Book  II,  pp.  403- 
426. 

BISHOP:  "History  of  American  Manufacturers,"  Vol.  II,  pp.  256-505. 

BABBENO:  "American  Commercial  Policy,"  pp.  146-183. 

RINGWALT:  "Development  of  Transportation  Systems  in  the  United 
States,"  pp.  41-54,  64-166. 

CHITTENDEN:  "Steamboat  Navigation  on  the  Missouri  River,"  Vol.  II, 
pp.  417-424. 

SEMPLE  :  "American  History  and  its  Geographic  Conditions,"  pp.  52-74. 

DONALDSON:  "Public  Domain,"  pp.  1-29,  196-239,  332-356. 

SANBORN:  "Congressional  Grants  of  Land  in  Aid  of  Railways,"  Bulletin 
of  University  of  Wisconsin  Econ.,  Pol.  Sci.  and  Hist.  Series,  Vol.  II, 
No.  3,  pp.  269-254. 

HART:  "History  as  Told  by  Contemporaries,"  Vol.  Ill,  pp.  459-478. 

QUAINTANCE:  "Influence  of  Farm  Machinery,"  pp.  1-103. 

BEMIS:  "Discontent  of  the  Farmer,"  J.  Pol.,  EC.,  Vol.  I,  pp.  193-213. 

JOHNSON:  "American  Railway  Transportation,"  pp.  24-68,  307-321, 

367-385. 
Organization  of  Business  Enterprises. 

BENTLEY:  "Corporation  Finance  and  Accounting." 

SULLIVAN:  "American  Corporations." 

VEBLEN:  "The  Theory  of  Business  Enterprise." 

WOOD:  "Modern  Business  Corporations." 

CONYNGTON:  "Corporate  Organization." 

FRANK:  "Science  of  Organization  and  Business  Development." 

KIRSCHBAUM  :  "  Business  Organization  and  Administration." 

SPARLING:  "Business Organization." 

MEADE:  "  Corporation  Finance." 

DUNCAN:  " Principles  of  Industrial  Management." 

HENDRICK:  "The  Power  to  Regulate  Corporations  and  Commerce." 

RIPLEY:  "Trusts,  Pools,  and  Corporations." 

FLOY:  "Valuation  of  Public  Utility  Properties." 

BURTON:  " Corporations  and  the  State." 

WHITTEN:  "Valuation  of  Public  Service  Corporations." 

GREEN:  "Corporation  Finance." 

MEADE:  "Trust  Finances." 

COMMON:  "Trade  Unions  and  Labor  Problems." 


A  BIBLIOGRAPHY  OF  WORKS  MANAGEMENT  387 

WEBB:  "Industrial  Democracy." 

HOBSON:  "Evolution  of  Modern  Capitalism." 

ELY:  "Monopolies  and  Trusts." 

Industrial  Commission  Report. 

Commissioner  of  Corporations:  Report  on  the  Beef  Industry;  Report 

on  the  Transportation  of  Petroleum;  Report  on  the  Petroleum  Indus- 
try. 

MONTAGUE  :  "  The  Ethics  of  Trust  Competition,  in  Atlantic,"  Vol.  XCV. 
MONTAGUE:  "The   Transportation   Phase   of   the   Oil   Industry,"   in 

Journal  of  Political  Economy,  Vol.  XV. 
ADAMS:  "The  Relation  of  the  State  to  Industrial  Action,"  in  American 

Economic  Association  Publication,  Vol.  I. 
WILLOUGHBY:  "Integration  of  Industry  in  the  United  States,"  Vol. 

XVI,  pp.  94-115. 
NOVES:  "Recent  Economic  History  of  the  United  States,"  Vol.  XIX, 

pp.  188-209. 

Twelfth  Census,  Vol.  VII,  pp.  110-214. 
Industrial  Commission,  Vol.  XIII,  pp.  5-18. 
BULLOCK:  "Trust  Literature,"  Vol.  XV,  pp.  167-217. 
ALLEN:  " Business  Employment." 

BLOOMFIELD:  "Relations  of  Foremen  to  Working  Force." 
BRISCO:  ' 'Economics  of  Business." 
CADBURY:  ''Experiments  in  Industrial  Organization." 
CARPENTER:  "Profit  Making  in  Shop  and  Factory  Management." 
DRESSER:  "Human  Efficiency." 
ENNIS:  "Works  Management." 
GOING:  "The  Principles  of  Industrial  Engineering." 
HINE:  "Modern  Organization." 
JONES:  "Business  Administration." 
KELLY:  "Hiring  the  Worker." 
KENT:  "investigating  an  Industry." 
KIMBALL:  "Principles  of  Industrial  Organization." 
LINCOLN:  "The  Factory." 
McVEY:  "Modern  Industrialism." 
PARSONS:  "Office  Organization  and  Management.' 
PRICE:  "The  Modern  Factory." 
Transportation. 

COOLEY:  "The  Theory  of  Transportation." 

JOHNSON:  "American  Railway  Transportation." 

JOHNSON:  "Ocean  and  Inland  Water  Transportation." 

HADLEY:  "Railroad  Transportation." 

MEYER:  "Government  Regulation  of  Railway  Rates." 

RIPLEY:  "Railway  Problems." 

NEWCOMB:  "Railway  Economics." 

NOYES:  "American  Railroad  Rates." 

MEYER:  " Railway  Legislation." 

"Industrial  Commission,"  Vol.  XIX,  pp.  466-481. 

ADAMS:  "Chapters  of  Erie,"  pp.  1-99,  333-429. 

DAVIS:  "The  Union  Pacific  Railway,  Annals  of  the  Amer.  Acad.,"  VoL 

VIII,  pp.  259-303. 


388     FACTORY  ORGANIZATION  AND  ADMINISTRATION 

VILLARD:  "Memoirs,"  Vol.  II,  pp.  284-312. 

DIXON:  "Interstate  Commerce   Acts  as  Amended,"    Vol.   XXI,    pp. 
22-51. 

CHISHOLM:  "Inland  Waterways." 
Selling  and  Advertising. 

ATKINSON:  "Psychology  of  Salesmanship." 

BRIDGE  WATER:  "Advertising." 

BALMER:  "The  Science  of  Advertising." 

BELLAMY:  "Effective  Magazine  Advertising." 

BUNTING:  "Specialty  Advertising." 

BOWKER:  "Copyright,  Its  History  and  Its  Law." 

SHRYER:  "Analytical  Advertising." 

STARCH:  "Principles  of  Advertising." 

System  Co.,  "How  to  Write  Letters  That  Win." 

SINGER:  "Patent  and  Trade  Marks  Laws  of  the  World." 

SWAN:  "Patents,  Designs  and  Trade  Marks." 

THOMPSON:  "Things  to  Know  about  Trade  Marks." 

VARDAMAN:  "The  Master  Salesman." 

CORBION:  "Principles  of  Salesmanship." 

COLLINS:  "Human  Nature  in  Selling  Goods." 

CASSON:  "Ads  and  Sales." 

CALKINS  AND  HOLDEN:  "Modern  Advertising." 

COLEMAN:  "Advertising  Development." 

CHERINGTON:  "Advertising  as  a  Business  Force." 

Copyright  Office  Bulletins. 

DAVENPORT:  "Value  and  Distribution." 

DEWEESE:  "Principles  of  Practical  Publicity." 

FOWLER:  "Practical  Salesmanship." 

FARRINGTON:  "Store  Management." 

HIRSCHLER:  "Art  of  Retail  Selling." 

HESSELTINE:  "Law  of  Trade  Marks  and  Unfair  Trade." 

JOHNSON:  "Library  of  Advertising." 
KNOX:  "Salesmanship  and  Business  Efficiency." 
LENINGTON:  "Seven  Principles  of  Successful  Salesmanship." 
LINDGREN:  "The  New  Salesmanship." 
LAWRENCE:  "Making  Him  Buy." 
MACBAIN:  "Selling." 

MOODY:  "Men  Who  Sell  Things"  Moran,  "The   Business  of  Adver- 
tising." 

MACDONALD:  "Successful  Advertising." 
PARSON:  "Principles  of  Advertising  Arrangement." 
PAGE:  "Advertising." 

NEWELL:  "Patents,  Copyrights  and  Trade  Marks." 
PIERCE:  "Scientific  Salesmanship." 
POWELL:  "Practical  Advertiser." 
Statistics. 

DAVENPORT:  "Statistical  Methods." 
MULHALL:  "The  Dictionary  of  Statistics." 
BOWLEY:  "Elements  of  Statistics." 


rA  BIBLIOGRAPHY  OF  WORKS  MANAGEMENT         389 

MEITZEN:  "  History,  Theory,  and  Technique  of  Statistics." 

NEWSHOLME:  "Vital  Statistics." 

BERTILLON:  "Cours  Elementair." 

LEVASSEUR:  "La  population  francaise." 

BLOCK:  " Trait e  de  statistique." 

MAYO-SMITH:  "Statistics  and  Economics." 

DEWEY:  "  Discussion  of  Wage  Statistics  in  volume  on  Wages,  12th  U.  S. 

Census." 

Consular  Reports  (British  and  American). 
Publications  of  Census  Bureau  (and  of  other  Departments  on  Labor, 

Trade,  and  Finance). 
British  Board  of  Trade  Publications. 
Journal  of  the  Royal  Statistical  Society. 
Journal  of  the  American  Statistical  Society  (Articles  by  Mitchell,  James, 

Bullock,  etc.). 

Publications  of  the  State  Labor  and  Statistical  Bureaus. 
Trade  Unions. 

KIRK:  "National  Labor  Federations  in  the  United  States." 

WEBB:  "Industrial  Democracy." 

COMMONS:  "Trade  Unions  and  Labor  Problems." 

HOLLANDER  AND  BARNETT:  "Studies  in  Trade  Unionism." 

COGLEY:  "The  Law  of  Strikes,  Lockouts,  and  Labor  Organizations." 

EDDY:  "The Law  of  Combinations." 

ELY  :  "  The  Labor  Movement  in  America." 

HOWELL:  "Trade  Unionisin,  New  and  Old." 

Mitchell:  "Organized  Labor." 

Peters:  "Labor  and  Capital." 

SPEDDEN:  "The  Trade  Union  Label." 

U.  S.  Industrial  Commission  Reports. 

WEBB:  "History  of  Trade  Unionism." 


INDEX 


Accounting,  5,  51,  382. 

Accounting  system,  merging  costs 
into,  51,  284. 

Addressing  machine,  use  of  in  con- 
nection with  pay-roll,  268. 

Advisory  board  method  of  factory 
control  47,  60,  361. 

Aids  in  taking  inventory,  304. 

Air-spraying,  91. 

Air  washer,  93. 

Alterations  in  bills  of  material,  156. 

Alterations  in  orders,  151. 

Alterations  in  patterns,  172. 

Alterations  to  machinery,  239. 

Analysis  of  pay-roll,  66,  279. 

Application  for  employment,  114. 

Appraisals,  21,  313. 

Apprenticeship  systems,  127,  364. 

Arc  lamps,  97. 

Authorization  of  piece-work  rates, 
337. 

Babbage,  Chas.,  "Economy  of  Ma- 
chinery and  Manufactures," 
9. 

Balances  in  stock-room  recorded  on 
shop  tags,  221. 

Baldwin  Locomotive  Works  appren- 
ticeship system,  367. 

Banking,  syllabus  of  works  on, 
385. 

Bearing  bracket  data,  161. 

Betterment  work,  129,  359. 

Bibliography  of  Works  management, 
374. 

Billing  machine,  143. 

Bills  of  material,  152. 

Bill  of  material  used  for  posting  cost 
records,  300. 

Bins  in  packing  room,  254. 

Bins,  numbering  in  storerooms,  193. 

Bin-ticket,  191. 

Blake  &  Johnson  factory,  95. 


Blue-print  machines,  167. 

Blue-print  record,  167. 

Blue-print  storage,  163. 

Blue-prints,  mounting,  filing,  and 
issuing,  163,  167,  238. 

"Bonus  System  of  Rewarding 
Labor,"  by  H.  L.  Gantt,  re- 
viewed, 377. 

Bonus  system,  time  sheet  for,  271. 

Bonus  wage  system,  351,  353,  354. 

Buildings,  factory,  80. 

Burden  rates,  53,  286-288. 

Bushing  data,  160. 

Business  and  Engineering  Law,  syl- 
labus of  works  on,  382. 

Call-bell  system,  238. 

Carbon    copies    of    correspondence, 

139. 

Card's  machine  tool  recorder,  333. 
Car-load  shipments,  258. 
Car  record,  259. 
Castings,    perpetual    inventory    of, 

186. 

Castings  received,  report  of,  262. 
Castings,  record  of  foundry,  233. 

record  of  stock  of,  187. 

requisitions  and  purchase  or- 
der for,  179. 

requisition  in  foundry,  224. 

scrapped,  229. 

warehouse,  188. 
Centralized  control  in  the  factory, 

24. 

Changes  in  bills  of  material,  159. 
Changes  in  design,  360. 
Changes  in  drawings,  163. 
Changes  in  employees,  360. 
Changes  in  orders,  151. 
Changes  in  patterns,  171. 
Changes  in  piece-rates,  335,  346. 
Charts,  graphical,  63. 
Charts  organization,  39-50. 


391 


392 


INDEX 


Check  numbers,  assigning,  268. 

Checking  drawings,  167. 

Cipher  code  for  employees'  charac- 
teristics, 123. 

City  site  for  factory,  71,  74. 

Classification  of  shop  orders,  143. 

Clean  air,  91.   . 

Clerical  force,  need  of  sufficient,  364. 

Clock -card  used  as  work-card,  268. 

Coke  air  washer,  93. 

Commercial  Geography,  syllabus  of 
works  on,  383. 

Comparative    individual    operation 
costs,  299. 

Comparative  time  record  for  refer- 
ence in  rate  fixing,  337. 

Comparative  total  costs,  298. 

Competitors'  prices,  302. 

Completion  of  orders,  notice  of,  298. 

Component  part  costs,  286. 

Concrete  floors,  105. 

Concrete,  reinforced,  106. 

Continuation  schools,  365. 

Cooperation     between     accounting 
and  cost  departments,  295. 

Cooperation  between  employers  and 
employees,  359. 

Cooperative  engineering  schools,  371. 

Core-maker's  order  copy,  225. 

Correspondence,  136. 
filing  of,  137. 
interdepartmental,  137. 

Costs,  comparative,  299-301. 

Cost  department,  281. 

qualifications  of  head  of,  282. 
reports,  63,  64. 

Costs,  material,  285. 

Costs  merged  into  accounting  sys- 
tem, 284. 

Cost  postings  checked  against  pay- 
roll, 288. 

Cost  record  on  bill  of  material,  155, 
300. 

Cost  system,  adapting  to  premium 
or  bonus  wage  systems,  356. 

Cost  system,  development  of,  283. 

Country  site  for  factory,  72. 

Credit    for    material    returned    to 
storeroom,  177. 


Cupola  charge  sheet,  231,  232. 

Cupola  report,  232. 

Currency,  syllabus  of  works  on,  385. 

Day -rate  of  pay,  field  for,  342. 
Defects  and  errors,  321,  322. 
Defective  castings,  229. 
Delays  due  to  time-posting,  270. 
Delays  in  purchase  orders,    180,  216. 
Demonstrators  in  rate  fixing,  362. 
Departmental  bills  of  material,  154. 
Departmental  reports,  58. 
Departments,   arrangements  of,  85. 
Depreciation,  21,  308,  311. 
Designing  factory  buildings,  80. 
Designing  department,  159. 
Desks,  flat-top  or  roll-top,  140. 
Detached  lots  of  stock  orders,  219. 
Detail  drawings,  164. 
Dimensional  inspection,  318. 
Direct  labor  defined,  288. 
Direct  shipments,  257. 
Distribution  of  labor,  279. 
Dooley,  C.  R.,  discussion  of  factory 

schools,  369. 
Double  entry  system,  merging  costs 

into,  51,  284. 

Drafting  department,  159. 
Drafting  department  report,  61. 
Draftsman's  time  cards,  168. 
Drawing  list,  162. 
Drayage,  183,  286. 
Duplicate  work  in  tool  department, 

241. 

Economics  of  workingmen,  syllabus 

of  works  on,  383. 
Educational  extension  work,  365. 
Education  for  factory  management, 

2. 
Efficiency  records  of  workmen,  123, 

237,  355. 

Electrical  inspection,  325. 
Employment  of  labor,  109. 
Employment  record,  115. 
Equipment,  inventorying,  309. 
Erection  inspection,  319. 
Errors  and  defects,  321,  322. 
Executive  control  in  the  factory,  40. 


, INDEX 


393 


Expense  account,  53,  289. 

Expenses,  hourly  rate  method,  292. 
localizing,  279,  294. 
manufacturing,  items  consti- 
tuting, 289. 

percentage  method  of  adding 
to  costs,  291. 

Express  charges,  183,  263/290. 

Extension  work  in  educating  work- 
men, 365. 

Factor  of  safety,  290. 

Feeds  and  speeds  of  machine  tools, 

records  of,  331. 
Files,  records  of,  241. 
Filing  catalogues,  182. 
Filing  correspondence,  137. 
Filing     orders    in    shipping    office, 

253. 

Filing  purchase  orders,  180. 
Filing  tracings  and  blue-prints,  162. 
Final  inspection,  320. 
Finance,     banking     and     currency, 

syllabus  of  works  on,  385. 
"Finding  lists"  in  storerooms  and 

warehouses,  193. 
Finished  parts  record,  188. 
Finished  product,  185,  284. 
Fireproof  vaults,  162. 
Fixing  piece-work  rates,  329. 
Fixtures,  orders  for,  148. 
Flaming  arc  lamps,  97. 
Floors,  factory,  104. 
Floor  inspection,  319. 
Foremen,  selecting,  110,  363. 
Foremen's  meetings,  60,  217. 
Foundry,  consecutive  job  list,  220. 
Foundry's  daily  record  of  work  done, 

227. 

Foundry  delivery  record,  228. 
Foundry  record  of  work  in  process, 

229. 

Foundry  systems,  224. 
Foundry  time  ticket,  233. 
Freight  charges,  286. 
Freight  claims,  260. 
Freight  payments,  259. 
Freight  receipts,  256. 
Functional  control,  26. 


"Gain  Sharing,"  by  Henry  R. 
Towne,  reviewed,  375. 

Gain-sharing  wage  systems,  347. 

Gantt,  H.  L.,  "A  Bonus  System  of 
Rewarding  Labor,"  reviewed, 
377. 

Gear  data,  160. 

General  office,  136. 

General  office  report,  60. 

Glass,  94. 

Glass,  prismatic,  97. 

Good  management,  principles  under- 
lying, 359. 

Graphical  charts,  63. 

Group  arrangement  of  bill  of  mate- 
rial, 154. 

Groups  of  parts,  inspection  of,  319. 

Health  as  affected  by  heating  sys- 
tems, 91. 

Heating  systems  for  factories,  89. 
Hiring  labor,  109. 
Hot  blast  heating  system,  91. 
Hourly  expense  rates,  292. 
Hourly  machine  rate,  294. 
Human  element  in  manufacturing,  7. 
Humidifying  air,  93. 

Ideals  to  be  attained  in  manufactur- 
ing, 129. 
Illumination,  94. 
Incandescent  lamps,  97. 
Indexing    in    drafting    department, 

159. 
Indirect    heating    pressure    system, 

90. 

Indirect  labor,  53,  148,  288. 
Industrial  agents  of  railroadsr  75. 
Industrial  engineer,  employment  of, 

108,  372. 
Industrial    History    of    the    United 

States,  syllabus  of  works  on, 

385. 
Inspection,  dimensional,  318. 

electrical,  320. 

erection,  319. 

final,  320. 

floor,  319. 
Inspection  methods,  317. 


394 


INDEX 


of 


Inspection  of  groups  of  parts,  319 
Inspectors,  qualification  of,  321. 
Inspectors'  report,  324. 
Instructions  to  time-takers,  272. 
Interdepartmental     movement 

work  in  process,  212. 
Interest,  as  part  of  cost,  290. 
Inventory,  aids  in  taking,  304. 

classifying  materials,  305. 

precautions  in  taking,  313. 
Inventory  tags,  306. 
Invoices,  checking,  184. 

Job-card,  275. 


Labor  account,  52,  274,  286. 

Labor  conditions  as   affecting  fac- 
tory site,  72. 

Land,  cost  of,  as  affecting  type  of 
building,  74. 

Labor  cost,  posting  of,  286. 

Labor  distribution,  report  of,  279. 

Labor  efficiency  records,   126,   339, 
345,  355. 

Labor  problems,  109. 

Labor,  productive,  defined,  288. 

Lamps,  arc,  97. 

incandescent,  97. 
mercury  vapor,  97. 

Laws  of  Business,  syllabus  of  works 
on,  382. 

Laying  out  factory  buildings,  80. 

Letters,  filing,  137. 

Light  in  shops,  94. 

List  of  parts,  152,  300. 

Literature  pertaining  to  works  man- 
agement, 374. 

Localizing  expenses,  279,  294. 

Locating  a  factory,  71. 

Location  of  lockers,  87. 

Location  of  power  plant,  102. 

Location  of  wash-rooms,  87. 

Lockers,  location  of,  87. 

Loyalty  of  employees,  359. 

Machine  rate,  hourly,  294. 
Machine  shop  and  tool  department, 

236. 
Machine  tools  classified,  249. 


Machines,  arrangement  of,  83. 

Machinery  proposition  for  new, 
251. 

Mail,  opening  of,  136. 

Management  of  factories,  educa- 
tion for,  2. 

Management  of  factories,  bibliog- 
raphy of  works  relating  to, 
374. 

Management,  principles  underlying, 
359. 

Manifold  copies  of  orders,  143. 

Manufactured  parts,  record   of,  188. 

Manufacturing  department  report, 
61. 

Market  as  affecting  factory  site, 
73. 

Material  account,  52. 

Material  costs,  285. 

Materials,  inspecting,  317. 

Materials  received  report,  261. 

Mechanical  engineering,  7. 

Meetings  of  department  heads,  28, 
204. 

Merging  costs  into  accounting  sys- 
tem, 51,  284. 

Mercury  vapor  lamps,  97. 

Messenger  system,  137. 

"Minimum"  stock  of  standard 
parts,  191,  194. 

Monitor  roof,  87,  97. 

Monthly  stock  balances,  197. 

Moulders'  order  copy,  225. 

Moulders'  time  card,  347. 

Mounting  blue-prints,  163. 

Moving  work  in  process,  212,  237. 

National  Motor  Vehicle  Co.,  organi- 
zation, 44. 

Night-schools  for  workmen,  370. 

Non-productive  labor,  orders  cov- 
ering, 53,  148,  279,  288. 

Non-productive  travel,  avoidance 
of,  80,  83. 

Notification  to  workmen  of  gains 
under  premium  or  bonus  wage 
systems,  350,  352. 

Numbering  bins,  193. 

Numbering  parts  and  patterns,  159. 


INDEX 


395 


Observational  data  as  basis  for  rate 

fixing,  335. 
Obsolete  parts,  308. 
Office  employees,  record  of,  115. 
Office,  general,  136. 
Officials,   selection  of,    6,    110,   344, 

360. 

Opening  mail,  136. 
Order  department,  142. 
Order  on  storeroom,  178,  199. 
Order  on  tool-room,  240,  243. 
Orders,  classification  of,  143. 

delivery  to  foremen,  203. 

manifold  copies  of,  143. 
Orders  to  repair  machinery,  239. 

tracing,  61. 

Organization  charts,  28—44. 
Organization  of  business  enterprises, 

syllabus  of  works  on,  386. 

Packing  card,  254. 

Packing  list,  256. 

Partial  delivery  of  parts  on  stock 

orders,  219. 

Partial  shipments,  146,  257. 
Parts,  lists  of,  152. 

numbering,  159. 

record  of,  186-191. 

tracing  of,  210. 
Passage  ways,  83,  101. 
Pattern  department,  169. 
Pattern  makers'  time-card,  170. 
Pattern  material,  169. 
Patterns,  numbering,  159. 
Pattern  orders,  169. 
Patterns  received,  report  covering, 

266. 

Pattern  record,  159,  171. 
Pattern  storage,  169. 
Pattern-tag,  174. 
Pay-roll  analysis,  66,  279. 
Pay-roll  checked  with  cost  postings, 

272,  287. 
Pay-roll  systems  for  various  wage 

systems,  330,  336,  356. 
Perpetual  inventory,  186,  191. 
"Piece  Rate  System,"  by  F.  W. 

Taylor,  reviewed,  375. 
Piece-work,  field  for,  345. 


Piece-work  rates,   changes  in,   338, 

344. 
Piece-work  rates,  the  fixing  of,  329- 

335. 
Pittsburg  district,  welfare  work  in, 

370. 

Planning  work  ahead,  201,  222. 
Potter  &  Johnson  factory,  106. 
Power  plant,  location  of,  102. 
Premium    systems   described,    348- 

356. 
Premium  system,  -efficiency  record 

under,  355. 
Premium    system,    time-sheet    for, 

356. 

Press  working  of  metals,  249. 
Price  list  of  purchases,  182. 
Prismatic  glass,  97. 
Production    department,    functions 
of,  201-211,  222. 

qualifications  of  head  of,  204. 

report,  61. 

Production  engineering,  7. 
Productive  labor  defined,  288. 
Promise  dates  of  completion  of  shop 

orders,  210,  216,  221. 
Promises   to    fill    purchase   orders, 

180. 

Pulley  data,  160. 
Purchase  order,  179. 
Purchase  record,  182. 
Purchased  finished  parts,  185. 
Purchases,  delivery  of,  180,  205,  216. 

reports  of,  67. 
Purchasing  agent,  qualifications  of, 

175. 
Purchasing    department,    functions 

of,  175. 
Purchasing  important  parts  before 

completion  of  bill  of  material, 

157. 

Railway  industrial  agents,  as  judges 

of  factory  sites,  75. 
Railway  transportation,  syllabus  of 

works  on,  387. 
Rate-fixing  department,  329. 
Raw  material  as  affecting  factory 

site,  71. 


396 


INDEX 


Raw  material  costs,  record  of,  286. 

Raw  materials,  inspecting,  317. 

Raw  material  records,  186. 

Recalling  bills  of  material,  156. 

Receipts  of  castings  report,  262. 

Receipts  of  material  report,  261. 

Receiving,  26. 

Reception  room,  140. 

Reinforced  concrete,  108. 

Release  card,  1 25. 

Remington  Typewriter  Co.  organi- 
zation, 41. 

Repair  orders,  148. 

Repairs  to  machinery,  239. 

Replenishment    of    storeroom    sup- 
ply, 194. 

Reports,  cost  department,  62,  65. 
departmental,  58. 
drafting  department,  61. 
general  office,  60. 
inspectors',  324. 
manufacturing     department, 
61. 

Reports  of  labor  distribution,  279. 

Reports  of  purchases,  68. 

production  department,  61. 
summarizing,  63. 
tracing  department,  211. 
weekly,  60. 

Request  for  production  order,  194. 

Requisition  on  foundry  for  castings, 
224. 

Requisitions  on  purchasing  depart- 
ment, 126. 

Requisitions  on  storekeeper,  194. 

Returned     goods,     disposition     of, 
265,  322. 

Returned  purchases,  182. 

Roof,  factory,  94-97. 
monitor,  94-97. 
saw-tooth,  94-97. 

Rowan  sliding  scale  wage  system, 
349. 

Rules,  booklet  of,  133. 

Rush  orders,  213. 

Sanitation,  99. 

Saw-tooth  roof,  94-97. 

Scheduling  machine-shop  work,  210. 


Schneider's  plan  for  cooperation  be- 
tween engineering  school  and 
industries,  371. 

School-work  in  factories,  365. 

Scrapped  castings,  229. 

Scrapping  defective  parts,  321. 

Selling  prices  based  on  shop  costs, 
281. 

Shape  of  factory  buildings,  85-88. 

Shipping,  253. 

Shipping  and  Receiving  Depart- 
ments, 253. 

Shipping  record,  255. 

Shipments,  carload,  258. 

direct  from   other   factories, 
257. 

Shipments  direct  from  shop   floor, 

320. 
partial,  146. 

Shop  drawings,  1 63. 

"Shop  Management,"  by  Fred  W. 
Taylor,  reviewed,  378. 

Shop  orders,  classification  of,  144. 

Shop  tag,  218. 

Single-floored  factory  buildings,  87. 

Sites,  factory,  71. 

Skylights,  94. 

Slow  burning  construction,  106. 

Social  betterment  work,  J  29. 

Speeds  and  feeds  of  machine  tools, 
records  of,  331. 

Special  manufacturing  order,  150. 

Specifications  covering  inspection, 
317. 

Splitting  orders  of  work  in  process, 
219. 

Spraying  air,  93. 

Standardizing  drawings,  159. 

"Standard  Operation,"  time  sheet 
for,  271. 

"Standard  Operation,"  wage  plan, 
348. 

Standing  orders,  148,  279,  288. 

Statistics,  syllabus  of  works  on,  387. 

Stock  balances,  monthly,  197. 

Stock  defined,  185. 

Stock-moving,  212,  237. 

Stock-room  methods  and  systems, 
185. 


INDEX 


397 


Stock-taking,  304. 

Stop-watch,  use  of  in  rate  fixing,  332. 
Storage  of  work  in  process,  83. 
Stores  and  stock  departments,  185. 
Suburban  site  for  factory,  76. 
Suggestion  system,  128,  251. 
Summarizing  reports,  63. 
Summary  of  cost,  297. • 
Superintendent  as  related  to  produc- 
tion department,  206. 
Supplies  defined,  186. 
Supply  department,  148. 

Tabulating  machine  used  in    time- 
taking,  277. 
Tagging  materials  for   inventorying, 

306. 
Tags  for  tracing  work  in  process, 

218. 
Taylor,  Fred  W.,  5. 

"A  Piece-rate  System,"  reviewed, 

376. 
"Shop    Management,"    reviewed, 

378. 

Telephone  operator,  140. 
Templets  of  machinery,  use  of,  84,  85. 
Temporary  bin-ticket,  193. 
Testing   assembled  machines,   319- 

320. 
Testing  department  report,  61,  326- 

328. 

Test  record,  326. 
Tests  of  tool-steel,  241. 
Test  tag,  327. 

Time-card  for  calculagraph,  275. 
Time-card  for  each  job,  275. 
Time-card  for  tabulating  machine, 

278. 

Time-card  of  pattern-makers,   170. 
Time-cards  for  draftsmen,  168. 
Time-cards   of  foundry   employees, 

230. 

Time-clock,  268. 
Time-estimates  of  completing  orders, 

213. 

Time-posting,  delays  due  to,  271. 
Time-sheet,  weekly,  271. 
Time-stamps,  130,  270. 
Time-study  data,  recording,  335. 


Time-taker,  271. 

Time-takers,  instructions  to,  272. 

Time-taking,  268. 

Tipless  incandescent  lamps,  98. 

Titles" of  drawings,  164. 

Tool  department,  236. 

Tool  orders,  148,  240. 

Tool  room  fixtures  and  storage  de- 
vices, 245. 

Tool  room  orders,  240. 

Tool     steel,     identifying     different 
brands,  244. 

To.ol  steel  tests,  241. 

Tools,  records  of  those  required  to 
make  any  part,  243. 

Tote  boxes,  102. 

Towne,  Henry  R.,  1. 

"Gain    Sharing,"    reviewed, 
375. 

Tracing  assembled  groups,  214. 

Tracing  department  report,  217. 

Tracing  function  of  production  de- 
partment, 210. 

Tracing     individual     part    orders, 
210. 

Tracing    interdepartmental    move- 
ment of  work  in  process,  212. 

Tracing  orders,  142. 

Tracing  parts  and  groups  to  make 
up  complete  machines,  214. 

Tracing  patterns,  174. 

Tracing  progress  of  orders  in  foun- 
dry, 229. 

Tracing  purchased  items,  216. 

Tracing  record  on  bill  of  material, 
215. 

Tracing  tag,  218. 

Tracings,  filing  and  storing,  162. 

Trade  unions,  syllabus  of  works  on, 
388. 

Transportational  facilities  as  affect- 
ing factory  site,  72. 

Transportation  in  shop,  99. 

Unsatisfactory     purchased     goods, 
182. 

Valuing  for  inventory,  313. 
Vault  for  tracings,  162, 


398 


INDEX 


Wage  systems,  342. 
Washing  air,  93. 
Wash-rooms,  location  of,  87. 
Weekly  meetings,  217. 
Weekly  reports,  59. 
Weekly  time-sheet,  271. 
Welfare  work,  130. 
Western  Gas  Construction  Co.,  or- 
ganization, 46. 


Westinghouse  industries,  educa- 
tional activities  in  vicinity 
of,  369. 

Wood,  use  of  in  factory  construc- 
tion, 104. 

"Work  in  Process"  Account,  53, 
284. 

Work  in  process,  room  for,  83. 

Works  manager,  duties  of,  40. 


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